Dear tutors,
I have one problem with this question:
During the period from 1 January 20X7 to 1 September 20X7, Perkins Co sold $1m of goods to Swanson Co at a margin of 30%. Swanson Co had sold all of these goods on to third parties by 1 September 20X7.
In the BPP book, the answer is like this:
Cost of sales (23,980 – 4,400 (6600 * 8/12)) (19580)
Why don't they add back the COS 700 for this?
I am looking forward to receiving your answer.
Thanks a lot.
Ask the Tutor ACCA FR
229 Perkins Co Mar Jun 2018
5y ago#1Hi,
As all of the goods have been sold by the reporting date the profit on them has been realised and therefore no PUP adjustment is required.
Thanks
5y ago#3No, you need to be very careful. The intra-group sale is always eliminated regardless of whether there are good remaining in inventory at the reporting date.
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