- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
- Posts
Hi i was doing JUNE 11 (Q2) but i dont understand note (iv) and note (vi) and also regarding note (v) why is it that the goods delivered to highwood are deducted from closing inventory?i thought that since highwood is the one receiving the goods it should be added back..
There are a number of posts on this site (F7 ask the tutor) fully explaining in great detail how to tackle the tax issue – because IT WILL BE IN THE EXAM TOMORROW (probably)
Re the inventory issue, we counted the stock on 4 October and want to know what it was 4 days earlier. So, take the figure for 4 October, deduct all inventory received in last 4 days (because it wasn’t there at 30 September – it only arrived AFTER 30 September) add on goods delivered on 1, 2, 3 and 4 October because they WERE there at 30 September – they were only sold in October – and you should arrive at the figure for closing inventory as at 30 September
As for point number vi, ask yourself, did Highwood REALLY sell these receivables or is the money received in fact a loan. Take it from there
- You must be logged in to reply to this topic.