Q. newmarket revenue as shown in its draft statement of profit or loss for the year ended 31 dec 2009 is 27 million . this includes:
1) . 8 million for consignment of goods sold on 31 dec 2009 on which newmarket will incur ongoing service and support costs for two years after the sale . the cost of providing service and support is estimated at 800000 pa. newmarket applies a 30% mark up to all service costs.
2.} 4 (four) million collected on behalf of aintree. newmarket acts as an agent for aintree and receives a 10% commission on all sales
at what should revenue be shown in statement of profit or loss of newmarket for the yea ended 31 dec 2009 ignore time value of money
a 22920,000
b 21800,000
c 20520,000
d 21320,000
ans is d 21320,000
rev 27000 +commission 400 (4000*10/100)- 4000( agent collection) after this what is to be done i am stuck could you help and explain
thank you in advance sir
Ask the Tutor ACCA FR
revenue mcq
800,000 x 2 = $1,600,000
Add 30% mark up
$1,600,000 + $480,000 = $2,080,000
So, $27,000,000 - $4,000,000 + $400,000 - $2,080,000 = $21,320,000
Ok now?
here mark up means on cost right ,
why not 1600000*30/130
You've said it yourself! Mark up is on cost and the question is clear about this when the question actually states "the COST of providing service and support is estimated at $800,000 pa"
Well, if the cost is that much and mark up is 30%, how much is included in the figure of $8,000,000 with reference to service and support?
$8,000,000 x 2 x 30%
Follow my figures as you re-read the question and I think (hope) that you'll begin to see the logic of the calculation
Ok?
i got it. thank you sir
Of course, my earlier post should have read:
$800,000 x 2 + ($800,000 x 2 x 30%)
Now maybe it will make sense!
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