ACCA FR Chapter 24 Group statement of profit and loss Questions
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For question 7, shouldnt Tour’s portion of the consol income be for 4 months (Oct – Jan) rather than 8 months . I calculated Tour’s portion as 90, so along with Tangier’s 260, it would be 350. Where did i go wrong
during the post-acquisition period of 4 months, he gained double, so 4*2=8. {8X (pre-acquisition) and 8X (post-acquisition)}. Therefore 360*8/16 is 180 and 260+180 is 440, so the answer is $440
I do not understand why $17,250 was added to the cost of sales in #3. I will appreciate an explanation of this.
that is the unrealised profit, which has to be added back after we account for intragroup sales of (55 x 12 = 660)
@bulgermarina , that is to calculate the PURP, i.e. to reach at COS figure
Hello, Could you please explain me how total revenue is calculated on questions 5, 6 and 7? Many thanks in advance.
If we have 3 months pre-acquisition and 9 months post-acquisition and post-acquisition monthly revenue is on average twice the pre-acquisition monthly revenue, then revenue for each of the 3 months pre-acquisition is, say, $1,000 and revenue for each of the 9 months post-acquisition is therefore $2,000
So total revenue for the year is $3,000 + $18,000 = $21,000 of which $18,000 (or 18/21) relates to the post-acquisiiton period
Now eliminate any intra-group revenue and there’s your answer
Is that better?
That’s been cleared up now. Thank you for your prompt reply.
Hello, could you please explain me: in question 5 « Whey had managed to sell only 1/5 from 25000 purchased ». Doesn’t it mean that we need to do adjustment only for 20000 left in the group? Thank you
Please I still do not understand your explanation if how we calculated revenue in questions 5 to 7.
Thank you Sir,
for a great Explanation which make the context calculation clear.