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Please , Chris I won’t bug you with much of the qurstion from Kaplan kit . But here is purp calculation that I don’t known how kaplan got the answer to be $2m .
From the note in the questions :
Offspring ( subsidiary ) sold goods for $15m in the post acq period. $5m of these goods are included in the inventory of the Parentis(parent) at 31 March 2007( end period). The profit made by Offspring on these sales was $6.
Please , how do they arrive at $2 as purp because it is said that the profit made by the subsidiary (Offspring) was $6m.
Thanks in advance .
Hi,
The PURP is calculated based upon the goods held in inventory at the reporting date. If $5m out of $15m are still held then 5/15 of the $6m profit is the PURP, i.e. $2m.
Thanks
I am delighted thank you very much and let me use this chance to say congratulations for winning the award as the best ACCA & CIMA lecturer.
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