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Chapter 10 Q 4 & 5

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 10 Q 4 & 5

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
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  • June 24, 2017 at 1:43 pm #393971
    Julia
    Member
    • Topics: 8
    • Replies: 42
    • ☆☆

    Dear Sir
    I apologise if the answer is obvious but I just do not seem to be able to get my head around this!

    Q4, Viktorija
    Could you tell me how the PUP is calculated ? I can’t get the 2.7 per answer page?

    Q5, Didzis
    Could you tell me why are we using the g/w impaired b/f in W3a rather than g/w impaired this year?

    Many thanks in anticipation.

    June 24, 2017 at 7:27 pm #394003
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    PUP in chapter 10 example 4 Viktorija:

    “During the year, Natalija had sold goods to Viktorija with a transfer value of $30,000 realising a gross profit of 27%. Viktorija thirds of these goods by the year end”

    Gross profit percentage of 27% on $30,000 sales = $8,100 profit

    There are still one third of these goods in inventory as at the year end so pup is 1/3 x $8,100 = $2,700

    What’s the goodwill impairment figure for this year? $9,125?

    What figure for goodwill impairment appears in the cost of sales calculation? $9,125?

    W3 (both (a) and (b)) are workings for the statement of financial position. They are shown in Didzis / Ansis answer merely to show that the two primary statements are closely linked

    Specifically to answer your question, working W3A is the working for the brought forward figure for consolidated retained earnings so we need to deduct the brought forward cumulative goodwill impairment (ie 75%) from the brought forward cumulative retained earnings

    Working W3B is the working for the carried forward figure for consolidated retained earnings so we need to deduct the carried forward cumulative goodwill impairment (ie 100%) from the carried forward cumulative retained earnings

    OK?

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