ACCA · Question 29 · Financial Reporting
Section B - Case 3: BioHealth Holdings
On 31 December 20X8, BioHealth's receivables included $150,000 due from MedTech. However, MedTech's payables only showed $120,000 due to BioHealth. The difference was due to a $30,000 cash payment made by MedTech on 29 December 20X8, which BioHealth did not receive and record until 4 January 20X9.
What adjustment is required in the consolidated statement of financial position as at 31 December 20X8 to eliminate this intra-group balance?
Answer options:
Deduct $120,000 from Receivables and deduct $120,000 from Payables.
Deduct $150,000 from Receivables, deduct $120,000 from Payables, and add $30,000 to Cash in Transit.
Deduct $150,000 from Receivables and deduct $150,000 from Payables.
Add $30,000 to Payables and deduct $150,000 from both Receivables and Payables.
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