Parent and subsidiary company accounting

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Hi All,

I have a scenario, where Company A is a parent company and Company B is a subsidiary company. Company A hold 100% of company B and is the only customer of company B.  Company B is manufacturing unit.

Company B raises purchase orders and purchases spare parts from suppliers, however the payment for such purchase is made by Parent company. How is accoutning done in such a case?

 

Replies (2)

supplier       a/c   dr.

     to Parent Co

treat parent as a H.O and accordingly pass the entries when purchase made pass normal entry for purchase and at the time of payment....make following entries.. supplier a/c dr. to parent company


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