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- This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
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- May 30, 2016 at 4:34 am #318011
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.
May 30, 2016 at 5:06 am #318013Is 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”?
May 30, 2016 at 5:28 am #318017These 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 ?May 30, 2016 at 6:12 am #318031That’s correct
So now you need to calculate the pup on those goods
Are you beginning to appreciate just how important it is that you read the question extremely carefully?
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