What’s the matter with the workings already shown?

Gross margin is a percentage based on selling price so that’s 10% x $15,000 unrealised profit

Mark up is a percentage based on cost so if it’s 25% on cost that means it’s 25/125 when applied to the sales figure and that means that the unrealised profit is 25/125 x $15,000

question 5, pre acq income=x, post acq=2x pre acq=3month, post acq 9month thus 3x and 18x total denominator=21x total post acq income=140*18/21=$120,000 120,000+150,000=$270,000 minus intra trading revenue bought $25,000 from subsidiary,1/5 sold left=25000*4/5=20000

270,000-20000=$250,000 but answer say $230,000, did i miss sth?

nbuchi says

help with calculations to solution 1 will be much appreciated. Thanks

MikeLittle says

What’s the matter with the workings already shown?

Gross margin is a percentage based on selling price so that’s 10% x $15,000 unrealised profit

Mark up is a percentage based on cost so if it’s 25% on cost that means it’s 25/125 when applied to the sales figure and that means that the unrealised profit is 25/125 x $15,000

OK?

myacca1990 says

Can you please explain how you apportioned time in question 5?

MikeLittle says

If the post acquisition activity was double the pre-acquisition activity then if we say pre-acquisition was X then post acquisition must be 2X

Pre-acquisition was 3 months (so 3X) and post-acquisition was 9 months (so 9 * 2X ie 18X)

Total revenue and profits is therefore 21X and pre-acquisition is 3 parts of that whereas post-acquisition is 18 parts of it

OK?

tikologo74 says

Chapter 10 Q3

Where does 12 come from?

MikeLittle says

How many months are there in a year?

Magdalena says

Hi,

Regarding the Q1 – shouldn’t the sales value DECREASE by unrealized profit amount?

Magdalena says

Ok, just see this is re. cost of sales, please ignore the question.

MikeLittle says

Ok, ignored

Maria says

Can you help me to find the solution of Q5, please?

aivi says

sorry forgot to mention -I dont know the answer to Question 3!

help please

MikeLittle says

Cancel revenue and cost of sales for the full year intra-group trade ( 12 x (30 + 25)) = 660,000 reduction in revenue and cost of sales

Increase cost of sales by the pup (11,250 + 6,000) = 17,250

Combined figure per question was 776,000 + 600,000 = 1,376,000

Reduced by 660,000 intra-group trade

Increased by 17,250 pup

Adjusted combined cost of sales 1,376,000 – 660,000 + 17,250 = 733,250

OK?

aivi says

hello

could you tell me the answer for this question?

no idea how to get to 733

jayelee says

Need assistance with question 3 as I do not know whether to include the inventory figures whether to use the share purchase amount of 70%

for8verlik says

question 5,

pre acq income=x, post acq=2x

pre acq=3month, post acq 9month

thus 3x and 18x total denominator=21x

total post acq income=140*18/21=$120,000

120,000+150,000=$270,000

minus intra trading revenue

bought $25,000 from subsidiary,1/5 sold left=25000*4/5=20000

270,000-20000=$250,000 but answer say $230,000, did i miss sth?

pamella says

Hi

Can u assist me on question 6.i thought the calculation is (180*6/12)+150..where am i going wrong??

MikeLittle says

The monthly revenue for the second six months was twice as great than for the first six months

If monthly revenue before acquisition was “x”, then after acquisition it was “2x”

So, for six months there was 6x worth of revenue and for six months there was 2 x 6x worth of revenue.

For the year there was 18x worth of revenue of which 12x was in the post-acquisition period

12/18 x 180 = 120

Add that to the parent’s revenue and you get to 270

Ok?