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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Incomplete Records
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
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.
Sorry for asking a stupid question, but how did u got 3\4 when the mark-up was 1\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.
I went through ur lecture sir, but it’s the fraction that I don’t understand.
Since the cost is $3 for every $4 selling price, the total cost is 3/4 times the total selling price.
Thanks alot
You are welcome 🙂