Inter company - Adjusting Entry - Double Counting Issue - Please Help!

[gesha007]

Hi All,

I have a riddle with inter-company / intergroup expenses with a new client which I can not wrap my head around:

The Scenario consists of 3 Entities which are LLC and file form 1065( A LLC,B LLC and C LLC). A LLC Owns 92% of B LLC and C LLC owns the remaining 8%. A LLC also owns 49% of C LLC. Essentially, A LLC owns effectively another 4% of B LLC via its 49% ownership in C LLC.

For example sakes assume that A LLC contributes $1000 into LLC B. LLC B then expenses the funds to LLC C. LLC C picks up the funds as income and then finally expenses the funds outside the group.

Upon running this model I noticed a double counting / intercompany issue which needs to be adjusted. I am not sure how much and what the entry would look like or on whose books.

I have a model in excell. Please PM me so I could send it onto you.

 

[jfuertes]

Hi, i am from Venezuela, excuse me for my english ...
You must remember that if you are in a group, you have two kinds of accountancy, a consolidated (as one company) and a separate (as multiples companies). To register that transaction you only create accounts receivable and accounts payable intercompanies, if the company not expense the money, if the company expense the money, a expense is create againt the accounts payable. In this case if LLC C expense the funds they have a account payable with LLC B, and LLC B have a account payable with LLC A and a account receivable with LLC C. LLC A have aaccount receivable with LLC B and less funds.

I hope had understood your problem, let me know please