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It has been discovered that goods with a cost of $6 million, which had been correctly included in the count of the inventory at 31 March, 2010, had been invoiced in April 2010 to customers at a gross profit of 25% on sales, but included in the revenue (and receivables) of the year ended 31 March, 2010. What adjustment is necessary (if any) to correct the above situation?
The answer is:
Dr Revenue 8,000
Cr Receivables 8,000I can’t understand where we got this figure. Could you help me with this, Sir?
How much is 75% of $8,000?
Does that do it for you or do you need a more detailed explanation?
Thank you, Sir. I actually missed the whole point, I’m afraid. But I listened to you lecture on this one yesterday (Revision Kit, June 2010 Exam Question 2 Dune), and understanding’d luckily come upon me. So, thank you once again.
That’s good, but remember, the revision mini exercises are there to practice what you have learned. They’re not intended to be attempted BEFORE you’ve heard the lectures!
Well, actually, I thought I could attempt them right after having heard all your lectures in the section ‘ACCA F7 lectures’, just to enhance my understanding, and then go to the ‘Revision Kit’. But I know better now 🙂
Hi Victoria
If you’ve listened to the lectures then you should be able to do the mini exercises! If you have any problems, get back to me
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