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ADJUSTMENT NUMBER ONE
i cant understand how to work it. the sales was on 1 october 2008 and reporting date was 30 sept 09. in the marking it has been multiplied by 2 etc when it has only been one year since sales. please help. thanks
Is it because the Revenue includes 2 more years’ servicing income after the reporting date and that equates to $1.2 million cost per annum
That figure then grosses up to $2 million per annum at the rate of 40% gross profit
For two years (only the year ended 30 September, 2009 has actually been earned and therefore correctly included in revenue) we need to reduce the revenue figure by $2 million for each of those two years and carry it forward as deferred income (1 year carried forward as a current liability and the second as a deferred liability)
Is that better?
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