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Page no.189 1.Cost of sales
question 2. I can not find opening inventory. Can you please help me?Page no.198. Taxation
question 2. I can not find current and differed tax liability. Can you please help me?Page no.199 Sundry
question 2. I can not find EPS. Can you please help me?All answers are in course notes. But I could not understood. So can you please give me explanation?
“His closing inventory was 30% higher than the opening inventory” So you should be able to arrive at the answer – the question asks you to find the value of the opening inventory!
Hint – let opening inventory be “x” and therefore closing inventory is “1.3x”
Current tax liability is given in the question as 18.7 million
Deferred tax liability is calculated by multiplying the timing differences by the tax rate ( 40m x 25% )
To calculate the earnings per share figure you will need to prepare the working to calculate the “rights fraction” in order that you can then take the next step and calculate the weighted average number of equity shares in issue during the year. For this, you’ll need to watch the video / listen to the audio lecture and work through the course notes
Hope all that helps!
🙂
hi
i am really struggling with qu 2 on Cost of sale i cant work it out even with the added information here i get the 1.3 as this is the 30& increase but cant use it to work out the opening inventory!!can u please explain?
manys thanksJemma – you need to go back to basic algebra!
Set up an equation such that, when you move the elements around, you finish with something like ” .3x = $**,***” and from there you can find what “x” is
Still struggling? Post again
yes i am still unclear, am i missing two numbers because both closing and opening inventory are missing, could you perhaps help me with the equation please?
i have also got stuck on question 5 excess depn & pup, in q2 how is the depreciation worked out at 40,000 because its useful life is 9 years so 100000/9 x 4 years already does not make 40,000??
OK, here goes. If sales are 450,000 and gross margin is 15%, then profit is 67,500 and cost of sales must therefore be 382,500.
Cost of sales is a combination of opening inventory + purchases – closing inventory.
If we let opening inventory be “x”, then we can say:
“x” + 400,000 – 1.3″x” = 382,500
Rearranging 400,000 – 382,500 = 1.3″x” – “x”
So 17,500 = .3″x”
Therefore “x” = opening inventory = 58,333 ie 17,500 / .3
OK?
First of all Sir Mike, thanks a ton for your sincere and dedicated efforts. Your lectures are really helpful.
Sir I am struggling at Deferred Tax. I saw your illustration on Revison Kit Q Fresco (June 2012) and tried to attempt mini exercises. I could only do Q2. (I was surprised I got the answer!)
Q1: Def Tax a/c: I put Cr b/d 12500 and then Cr c/d 14100
C tax: I put Dr c/d 28300Q3: D tax : I put Cr b/d 19200 and Dr c/d 800. I did $10m-$6m (the revaluation)= $ 4m then $4m x 20%=800
I have no idea what to do with provison…how to deal with it.I have tried to follow you on the Revision kit Q and also the Deferred Tax lecture but I seem of have lost a lot of grey matter on this. Seems like I can’t get a hang of the concept. I think I am also making a mistake on what to put where (e.g. Fresco. Tax refund is an asset of $2400. I was putting it Dr $2400 above the line in T/accounts. I need help. Its frustrating
Many thanks in advance.
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