[miracle657]

Dear tutor, i didn’t understand your explanations. ?n your example 15/110 is mark up not gross margin, however It is said that gross margin is higher relating to question. So both mark up and gross margin lower than electrical shop bcoz of wasted inventory? How is calculated gross margin and mark up relating to your example? Thanks in advance

[miracle657]

? couldn’t find the question. ?f i’m not mistaken correct answer was D or C.
Choice C may be true? I confused which one is corect and why? Deat tutor, could you pls give examples about choices D and C for clear understanding? Thanks in advance

[miracle657]

Dear tutor, why choice B is included carriage outward which is selling expense, how it is included cost as it isn’t carriage inward?
Why choice D isn’t correct? I thought theft of inventory change closing inventory (Cost), so profit margin.

[miracle657]

At 30 September 20X8, the following require items inclusion in MCD Co’s financial statements:
On 1 September 20X8, MCD Co received S5,000 as a deposit for goods which were despatched to the customer on 15 October 20X8.
On 1 August 20X8, MCD Co paid an insurance premium of $5,000 for the six month period commencing 1 July 20X8.
On 1 April 20X8, MCD Co raised a five-year bank loan of $12,000 which is repayable in a single capital sum at the end of the loan term. Interest is payable on the loan annually in arrears at 5% per annum.
For these items, what was the effect of these transactions total figures included in the MCD Co’s statement of financial position at 30 September 20X8?
Current assets Current liability
A) $17,000 $2800
B)$19,500 $10300
C)$14,500 $5300
D)$7,500 $5300
As you see this is also similar question and cash is included the calculations and correct answer is C. What is difference between these two questions? Which one is correct?

[miracle657]

Why wasted inventory is included Cost? I supposed wasted inventory or stolen inventory is included other expenses as they don’t sell

[miracle657]

“Financial reporting is a way of recording, analysing and summarising transactions of a business”. BPP (Workbook) chapter 1, page 3.
That’s why i confused.

[miracle657]

But Accounting is a way of recording, anlysing and summarising of financial datas as stated first chapter. How (1) is true without “analysing” part? Is it possible to summarise the datas without analysing? I didn’t understood.

[miracle657]

I understood, thank u very much. Another question about cash flow statement. If company take a loan (current). This short term loan is treated in the same way as non-current loan?
And second question: I know if company take a loan it’s financing activity. But if the company made a loan to another company, interest received relating to this loan is included investing activity or operating activity. How about the loan? It’s included financing activity or investing activity?

[miracle657]

Or it is true unless they mention this is his personal car?

[miracle657]

If there would be choice between alternatives including 3,4 it will be more acceptable?

[miracle657]

Sorry sir, Alternative A is correct i understood 🙂 i used 47 years for revised useful life instead of 46.5 years 🙂

[miracle657]

Sorry sir, may be i made a mistake when copying the question, if Keswick Co is parent company in this case alternative A is correct?

[miracle657]

Sorry sir, i didnt pay attention to the heading 🙂
So 12months period includes from 1 Oct 2009 to 30 Sept 2010, just payment take place on January 1st 2010, yes?

[miracle657]

If there would be purchase return in this case working capital will not change..is it true?

[miracle657]

So B,C, D all are correct?

[miracle657]

Or if the question use “may” instead of “should” is it possible to choose 1,4?

[miracle657]

So if there would be available option 1,4 can we choose this alternative?

[miracle657]

Yes,i have copied it correctly..Explanation as follows:
Final equity dividend for year ended 31st August 2009 26,000
Interim equity dividend for year ended 31st August 2010 17,000
Total dividend in SOCIE 43,000
Tutorial note: Equity dividends are not accounted for until officially approved
by the shareholders. In practice this rarely occurs before the year end and
therefore it is very rare to find a liability for equity dividends in the statement of
financial position. Proposed dividends are disclosed in a note to the financial
statements. Actual equity dividends paid are shown in the SOCIE.
Sir, as this explanation 28000 isn’t included in the statements because it is declared before the year end (20 August 2010)..Is it correct attitude?

[miracle657]

So can we call it right issue?

[miracle657]

Sir, pls check my question 🙂

[miracle657]

It is from Kaplan Kit 🙂

[miracle657]

Yes, i have copied it all correctly 🙂 it isn’t from BPP
Correct answer is 250$..Explanation as follows:
Total revenue from the servicing agreement 2250
Therefore, revenue per annum is 2250/3=750
Revenue for period 1 September-31December 20X7 is 4/12×750=250
They ask for the period ended 31 March 20X7, but explanation is relating to the period 1Sept-31Dec 20X7 🙂

[miracle657]

This question is from BPP study book…I have copied correctly 🙂

[miracle657]

Sorry sir, i didn’t read answers carefully..i understood myself)) alternative B isn’t credit sale))C is a credit sale 🙂

[miracle657]

Sorry, but I didn’t catch what you mean(( Given explanation confused me..
Explanation as follows:
“Tutorial not: IAS 37 requires that a provision should be recognised when it’s probable that there will be a future outflow of economic benefits as a result of a past event.
Based upon the licence terms,damage has already been caused which will cost $5 million to rectify in 20X7 or later.This should be recognised and classified as a non-current liability.If damage has not yet been caused,there is not yet an obligation to rectify it..Therefore at 31 August 20X4 no provision can be made for expected future damage.”
Sir, 2nd answer says 25 million current liability as a provision..but 20 million isn’t current i think..

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