3. Lotus LLC is the parent company of Moon LLC and a current account is used to record transactions between the companies. On 31 DEC 2019, the balance on this account appeared as an asset of OMR 32,500 in the books of Lotus LLC and as a liability of OMR 22,000 in the books of Moon LLC. This discrepancy is caused by the fact that Moon LLC sent a payment of OMR 10,500 to Lotus LLC on 30 DEC 2019. Lotus LLC did not receive the payment until 3 JAN 2020. A. Explain how this matter will be dealt with in the consolidated statement of financial position at 31 DEC 2019. B. What is Intra-group balances? Explain the circumstances under which Intra-Group Balances arise with examples?
3. Lotus LLC is the parent company of Moon LLC and a current account is used to record transactions between the companies. On 31 DEC 2019, the balance on this account appeared as an asset of OMR 32,500 in the books of Lotus LLC and as a liability of OMR 22,000 in the books of Moon LLC. This discrepancy is caused by the fact that Moon LLC sent a payment of OMR 10,500 to Lotus LLC on 30 DEC 2019. Lotus LLC did not receive the payment until 3 JAN 2020. A. Explain how this matter will be dealt with in the consolidated statement of financial position at 31 DEC 2019. B. What is Intra-group balances? Explain the circumstances under which Intra-Group Balances arise with examples?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. Lotus LLC is the parent company of Moon LLC and a current account is used to record transactions
between the companies. On 31 DEC 2019, the balance on this account appeared as an asset of
OMR 32,500 in the books of Lotus LLC and as a liability of OMR 22,000 in the books of Moon LLC.
This discrepancy is caused by the fact that Moon LLC sent a payment of OMR 10,500 to Lotus LLC
on 30 DEC 2019. Lotus LLC did not receive the payment until 3 JAN 2020.
A. Explain how this matter will be dealt with in the consolidated statement of financial
position at 31 DEC 2019.
B. What is Intra-group balances? Explain the circumstances under which Intra-Group
Balances arise with examples?
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