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PUP adjastment on revenue

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › PUP adjastment on revenue

  • This topic has 0 replies, 1 voice, and was last updated 5 years ago by AvatarRochikikakadu.
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  • December 2, 2020 at 7:21 pm #597426
    AvatarRochikikakadu
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    • Topics: 5
    • Replies: 3
    • ☆

    Below is Kaplan problem and its answer, as you can see in answer author hasn’t made PUP adjustment, can you tell me what is the reason? why we don’t have to make PUP Adjustment

    Problem:
    AB has owned 80% of CD for many years. In the current year ended 30 June 20X3, AB has 
    reported total revenues of $5.5 million, and CD of $2.1 million. AB has sold goods to CD during 
    the year with a total value of $1 million, earning a margin of 20%. Half of these goods remain 
    in year?end inventories. 

    What is the consolidated revenue figure for the AB group for the year ended 30 June 20X3? 

    Answer:
    $6,600,000  Consolidated revenue: AB $5.5m + CD $2.1m – $1m intra?group= $6.6 million  All intra?group sales and cost of sales are removed from the group accounts

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