PEV Nov 04

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GemmaLouise
GemmaLouise Registered Posts: 56 Regular contributor ⭐
Hi everyone!!!

just looking at section 2 of nov 04 - where you have to re do the profit and loss account for the factory- why is the closure cost not included in this???

thankyou!

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  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
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    My answer disagrees with the model answer the then chief assessor produced. But we both did not treat factory closure costs as a cost of Factory B.
    It is interesting to see the model answer has the following statement after the account
    Candidates may include or exclude closure costs within the profit statement
    I happen to think that the closure costs of Factory A are a company cost and not a Factory B cost so should be kept separately.
    This point crops up in 2.3 when you are asked to write about
    (a) a brief comparison of the performance of Factory B before and after
    closure of Factory A
    (b) a brief comparison of the company’s performance before and after
    closure of Factory A.
    Sandy
    sandy@sandyhood.com
    www.sandyhood.com
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