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Incomplete Records

AABRizni1010y ago
Sir can u pls explain? I copied this one of the ask the tutor, and I hope anything is not mistyped? Neha’s warehouse was damaged by fire on 5 November 2010 and most of the goods was destroyed. The goods that were salvaged was valued at $12000. Neha has provided the following information to enable the cost of the goods lost to be calculated. Extracts from the statement of Financial Position at 30 June 2010: Inventory $47000 Trade receivables $16000 Trade payables $23000 Further information for the period 30 June 2010 to 5 November 2010. Receipts from debtors $122000 Cash sales $17000 Payments to suppliers $138000 at 5 November: Trade receivables $ 37000 Trade payables $ 28000 Neha’s markup on goods sold is 33 1/3% My answer is for undamaged goods is 35475
John MoffatJohn MoffatTutor10y ago#1
Why are you attempting questions for which you do not have answers? You should be using a revision kit from one of the ACCA approved publishers - they have answers to all the questions (and then you would know if you were correct or not!). You can calculate the total sales during the period by preparing a receivables account - the total sales are $160,000. Therefore the cost of the goods sold = 3/4 x 160,000 = $120,000. You can calculate the purchases by preparing a payables account - the total purchases are $143,000. Therefore, had there not been damages goods the cost of goods sold would have been 47,000 + 143,000 - 12,000 = 178,000. Therefore the value of the goods lost = 178,000 - 120,000 = 58,000.
AABRizni1010y ago#2
Sorry for asking a stupid question, but how did u got 3\4 when the mark-up was 1\3
John MoffatJohn MoffatTutor10y ago#3
For every $3 cost, the markup is 1/3 x $3 = $1, and therefore the selling price is $4. Therefore for every $4 selling price, the cost is $3. I do suggest that you watch the free lecture on mark-ups and margins.
AABRizni1010y ago#4
I went through ur lecture sir, but it's the fraction that I don't understand.
John MoffatJohn MoffatTutor10y ago#5
Since the cost is $3 for every $4 selling price, the total cost is 3/4 times the total selling price.
AABRizni1010y ago#6
Thanks alot
John MoffatJohn MoffatTutor10y ago#7
You are welcome :-)
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