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section c

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › section c

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • June 21, 2021 at 3:18 pm #625996
    xyzc
    Participant
    • Topics: 413
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    newtown school (6/13)

    For part a) of this question, should the value of capital expenditure be adjusted for 6% inflation as in the case of salaries and repairs and maintenance. If not then why not

    Also, how to calculate the salaries figure.

    June 21, 2021 at 3:37 pm #626002
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Although the initial budget inflated the capital expenditure by 6%, note 3 of the question stated what the actual expenditure is going to be.

    According to note 2 of the question, the salaries will be increased by 2% on 1 December, which is 6 months through the accounting period. Therefore for half the year they will stay at the same rate as for y/e 31 May 2013m and for the other half of the year they will be 2% higher.

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