Manufacturing
Unrealized Intercompany Profit Elimination
Eliminating the 'markup' added when the manufacturing branch sells inventory to the retail branch of the same company.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Retained Earnings (or Revenue) | Equity (-) | 500.00 | - |
| Inventory (Asset) | Asset (-) | - | 500.00 |
💡 Accountant's Note
If the factory sells a unit to its own store for $10 profit, that profit isn't 'real' until the store sells it to a real customer. This entry 'cleans' the inventory value for consolidation.
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