In the exam paper on June 2006 in the question about consolidation the URP should be calculated:
"...Systan had made a consistent profit of 5% of the selling price. ... 4 mln in inventory.."
The examiner's calculation in the answer is: 4 mln x 5% = 200 000
Why is not the calculation: 4 mln x 5%/105% = 190 000
Thank you in advance
"...Systan had made a consistent profit of 5% of the selling price. ... 4 mln in inventory.."
The examiner's calculation in the answer is: 4 mln x 5% = 200 000
Why is not the calculation: 4 mln x 5%/105% = 190 000
Thank you in advance