Metro Systems Acctounting Entries
Autor: Koey Fong • August 4, 2016 • Case Study • 1,386 Words (6 Pages) • 670 Views
Metro Systems Corporation Public Company Limited (MSC) was founded on January 6, 1986 in Thailand. MSC has conducted its business as a product dealer and complete IT service provider with the registered capital of 360 million baht. Its subsidiaries include Metro Professional Products Co. Ltd, Metro Info Tech Co. Ltd., Metro Connect Co. Ltd. and Metro Info Dynamics Co. Ltd. The operations of the Company and its subsidiaries are distributors of computers and equipment, software, office equipment, telecommunication equipment and also providers of other related services.
Details of shares held by MSC in its subsidiaries:
Company | Numbers of Authorized shares capital (shares) | Percentage of holdings (%) | Held shares (shares) | |||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |
Metro Professional Products Co., Ltd. | 200,000 | 200,000 | 98.6000 | 98.6000 | 197,200 | 197,200 |
Metro Info Tech Co., Ltd. | 50,000 | 50,000 | 70.0000 | 70.0000 | 35,000 | 35,000 |
Metro Connect Co., Ltd. | 1,000,000 | 1,000,000 | 99.9997 | 99.9997 | 999,997 | 999,997 |
Metro Info Dynamics Co., Ltd. | 100,000 | 100,000 | 99.9940 | 99.9940 | 99,994 | 99,994 |
In 2015, the Company had the Inter-Company Transactions between Company and its subsidiaries for approximately 4 main categories of transactions, consisting of normal business transactions, normal business supporting transactions, short-term assets rental transactions, and other services transactions.
The focus of the case is the intercompany short-term assets rental transaction. The intercompany rental income gained by the parent company (MSC) is 3,874,560 Baht. In the following explanation, we will show the book entries and eliminating entries involved.
In the separate financial statement of the MSC, the transaction is recorded as rental income of 3,874,560 Baht. On the other hand, it is recorded as rental expense in the subsidiaries’ book.
Book Entry of MSC:[pic 1]
Cash / Accounts Receivable 3,874,560
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