I have a few question about Q2 in Kaplan mock exam (Dec. 2010)
#1
Revenue includes cash sales of $12 million for goods sold in October 2008 to Abbeyfax Plc, a bank. The goods are marked up at 25% on cost, Abbeyfax has the option to require Nemesis to repurchase these goods within 3 months of the year end at their original selling price plus a fee of $360,000.
In answer all of $360 fee accueed for the year ended 31.10.10 but Nemesis can use this loan for 4 months (even if we do not take into account that Nemesis could get the money 10/31/1910). If I acrrue only 1/4 of $360 = $90 000 whether it would be a mistake?
#2
A similar situation with 8% loan note ( $72 000). Would it be a mistake if a assume that Nemesis got tis loan at 01.05.10. So the accrued interest = 72000*8%*6/12= $2 880. Thus Interest payable = Accrued interest – Interest paid = nil ?
#1
Revenue includes cash sales of $12 million for goods sold in October 2008 to Abbeyfax Plc, a bank. The goods are marked up at 25% on cost, Abbeyfax has the option to require Nemesis to repurchase these goods within 3 months of the year end at their original selling price plus a fee of $360,000.
In answer all of $360 fee accueed for the year ended 31.10.10 but Nemesis can use this loan for 4 months (even if we do not take into account that Nemesis could get the money 10/31/1910). If I acrrue only 1/4 of $360 = $90 000 whether it would be a mistake?
#2
A similar situation with 8% loan note ( $72 000). Would it be a mistake if a assume that Nemesis got tis loan at 01.05.10. So the accrued interest = 72000*8%*6/12= $2 880. Thus Interest payable = Accrued interest – Interest paid = nil ?
