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Hi Mike,
I have 3 questions about the mini exercises :
* Question 14: Isn’t the correct answer 300k ? because the remaning balance is 1.3 m
* Question 15: I don’t follow what adjustment that should be done with the cash payment.
* Question 18: I don’t understand the answer included in the mini excercisesThanx for your help!
“Question 14: Isn’t the correct answer 300k ? because the remaning balance is 1.3 m” – what has the current account balance got to do with the pup calculation?
“Question 15: I don’t follow what adjustment that should be done with the cash payment.” – what has cash in transit got to do with the pup calculation?
“Question 18: I don’t understand the answer included in the mini excercises” – total cost of goods transferred back from S to P was $5.4m ($4 + $1.4) and these were transferred back invoiced at $9m so an overall profit of $3.6m
$1.5m of the invoiced value was still in inventory – that’s 1/6th of the goods
1/6th of the $3.6m profit is $600,000 and that’s the pup
OK now?
Dear Sir
Thanx for the further explanation I need to read more carefully questions or other way around I wont make it in the exam :/
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