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PICANT JUNE 2010
For transaction (ii),
How do i deal with the transaction ? We are not told how much of goods was unsold in inventory at 31 march 2010.
Is this the problem issue?
“(ii) At 31 March 2010 Picant’s current account with Sander was $3·4 million (debit). This did not agree with the equivalent balance in Sander’s books due to some goods-in-transit invoiced at $1·8 million that were sent by Picant on 28 March 2010, but had not been received by Sander until after the year end. Picant sold all these goods at cost plus 50%.”
Do you understand the words “some goods-in-transit”?
These 1800 GIT are assumed to be received by Sander. Therefore, at YE , these are the unsold inventory for Sander.
Therefore to account for the goods received by sander , we
-increase Sander’s inventory by 1800 &
-increase Sander’s payables by 1800 right ?
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