Profit sharing from regional office to local entity, (MNC structure)
There's a global parent entity (Parent), there's a regional office (RO) and there's local entity (LE). all are LLC companies. RO sent CU 10 million to LE as profit sharing. LE and RO agree they don't want to issue shares against it, and that money will never be returned.
Questions: What entries will be posted in LE books?
Debit: Bank... CU 10 million (of course)
Credit: Reserve / Other Income / Payables / COGS
There's a global parent entity (Parent), there's a regional office (RO) and there's local entity (LE). all are LLC companies. RO sent CU 10 million to LE as profit sharing. LE and RO agree they don't want to issue shares against it, and that money will never be returned.
Questions: What entries will be posted in LE books?
Debit: Bank... CU 10 million (of course)
Credit: Reserve / Other Income / Payables / COGS