XYZ company has three manufacturing plants at Chennai, New Delhi and Pune. It has sales offices at Bangalore, Calcutta, Chennai, Mumbai, New Delhi and Lucknow. It has warehouses at Bhopal, Cochin, Hyderabad, Mysore and Jaipur.
The company’s headquarters is Chennai.
XYZ has two businesses ;
⦁ Manufacturing & selling plastic furniture and
⦁ Plastic products for Industrial applications
XYZ needs to report profit/loss for each business. It’s manufacturing plants at Delhi and Chennai are dedicated to plastic furniture. Pune plant has two divisions: The first division takes care of design, manufacture and maintenance of the tooling such as mold for Delhi and Chennai plants. Second division produces Industrial Products on a make to order basis.
1) How many Ledgers are to be created to meet the reporting needs of XYZ ?
Only one set of books needs to be created when the functional currency, accounting calendar & chart of accounts are same for both the businesses. However chart of accounts should have a separate segment to identify the business.
2) How many segments are to be defined in the Chart of Accounts for the above scenario and identify each segment with an entity ?
Segment Entity
1 Balancing segment ( Business identity)
2 Department
3 Account code
4 Sub-account code
3) List the legal and balancing entities in the above case study ?
Balancing entities represent business divisions
⦁ Manufacturing & selling plastic furniture and
⦁ Plastic products for Industrial applications
Legal entity is only one.
4) Identify the Operating units and Inventory Organizations in the above case study to configure multi-org set-up.
Location Operating Unit Inventory organization
Chennai ## ##
New Delhi ## ##
Pune ##
Bangalore ##
Calcutta ##
Mumbai ##
Lucknow ##
Bhopal ##
Cochin ##
Hyderabad ##
Mysore ##
Jaipur ##
5) List the locations that will have multiple roles ?
Location Operating Unit Inventory organization
Chennai ## ##
New Delhi ## ##
