F1 group account – unrealised profit workings PUP

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January 26, 2017 at 7:16 am #369611
mwenyarobby
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Please assist me with the workings for unrealised profit (example) working PUP as the screen is cut out and can’t figure out how the 10 was arrived at.

thankyou
January 26, 2017 at 8:31 pm #369849
P2-D2
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The mark up is 20%, so we take 20/120 of the $120,000. This gives $20,000 but don’t forget that there are only half the goods left at year-end so we take half of this to give the $10,000.

You should be able to find the answer in the back of the class notes too.

Thanks
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