PEV Nov 04

GemmaLouise

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!

SandyHood

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.