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PURP

This topic has 3 replies, 2 voices, and was last updated 3 years ago by P2-D2.

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February 16, 2019 at 3:39 pm #505363
iyamu
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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 .
February 18, 2019 at 4:27 pm #505642
P2-D2
Keymaster
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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
February 18, 2019 at 6:48 pm #505656
iyamu
- Topics: 275
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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.
February 20, 2019 at 9:18 pm #505936
P2-D2
Keymaster
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Thanks, but I’ve not won any award yet. I’ve only been shortlisted. It’d be fantastic to win and we’ll find out next Tuesday 26th February………
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