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XTOL J14

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › XTOL J14

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 28, 2019 at 1:13 pm #517653
    maxpopper
    Member
    • Topics: 177
    • Replies: 132
    • ☆☆☆

    Sir in this question in the first adjustment which is regarding Revenue and comission. If I want to treat agency sales as other operating income, then this other operating income head will come after which head in statement of profit or loss? I mean would it be fine to show other operating income as follows
    GP X
    Dist exp (X)
    Admin exp (X)
    Other operating income – agency sales X
    Operating profit X
    Finance cost (X)
    Investment income X
    PBT X

    Secondly double entry for the above adjustment would be following na

    Dr Sales 20000
    Cr agency sales 2000
    Cr COS 15000
    Cr Payable 3000

    May 28, 2019 at 2:48 pm #517670
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    Yes, your presentation of other operating income is fine to show before operating profit.

    Also, your double entry is correct too. Top work!

    Thanks

    June 8, 2019 at 8:25 pm #519900
    maxpopper
    Member
    • Topics: 177
    • Replies: 132
    • ☆☆☆

    Sir here what would be more appropriate i.e to

    Dr Sales 20000
    Cr agency sales 2000
    Cr COS 15000
    Cr Payable 3000

    And here show agency sales as other operating income

    OR

    Dr Sales 18000
    Cr COS 15000
    Cr Payable 3000

    and here I am showing agency sales as revenue

    In a similar question of kit which says that Creg work as an agent for a
    number of smaller contractors earning commission of 10%. Creg’s revenue includes $6 million received from clients under these agreements with $5.4 million in cost of sales representing amount paid
    to contractors

    What adjustment needs to be made in revenue in respect of commission sales?
    a) Reduce revenue by $6 million
    b) Reduce revenue by $5.4 million
    c) Increase revenue by $600000
    d) no adj is required

    Here they have marked option b. So I think here they performed following entry

    Dr sales 5400
    Cr COS 5400

    So what is more appropriate

    June 12, 2019 at 1:16 pm #520294
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Either treatment is applicable.

    Thanks

  • Author
    Posts
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