Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › i can not post question
- This topic has 4 replies, 2 voices, and was last updated 6 years ago by MikeLittle.
- AuthorPosts
- May 24, 2017 at 6:23 pm #387903
why?
May 24, 2017 at 8:35 pm #387928Try the help page
May 24, 2017 at 9:24 pm #387936the question has been taken from becker test page number 68
Trial balance at 31 march 2017.
RE at 1 april 2016-12300
31 march-96700dexon profit or loss includes $7.8 milionof revenue for credit sales made in march. dexon applied a mark-up on cost of 30% on all sales.In april the auditors stated that the contract does not have commercial substance and revenue should not be recognised for this contract
debit revenue-7800
credit cost of sales-6000
credit trade payable-1800but we deduct 1800 from 96700
did i give double enrty correctly?
May 25, 2017 at 7:52 am #387968Because $1,800 is the profit element in a $7.8 million sale where the mark-up is 30%
We need to reduce Revenue and reduce Receivables
Dr Revenue $7.8 million
Cr Receivables $7.8 millionand we need to increase closing inventory by $6 million that has the dual effect of reducing cost of sales (therefore increasing profit) and increasing closing inventory by $6 million on the statement of financial position
Heaven alone knows why you should wish to increase trade payables …”credit trade payable-1800″!
May 29, 2017 at 7:51 am #388691I left this thread open for 4 days thinking that you may wish to come back to it, but you didn’t
- AuthorPosts
- The topic ‘i can not post question’ is closed to new replies.