Financial Statements paper 2 1.5E

How do i get to the answer £54,000, i just cant seem to get it. please help?

Comments

  • Zoynal98
    Zoynal98 MAAT, AATQB Posts: 65
    edited May 2017


    Hi,

    Please see workings below:

    Consolidated Cost of Sales = £70,000

    Additional Data:

    Sale to subsidiary: £18,000
    Cost of Sale: (£10,000)
    Profit: £8,000
    Unrealised profit = Profit x Stock left in inventories
    Unrealised profit = £8,000 x 0.25 (one quarter) = £2,000

    Answer: £70,000 - £18,000 + £2,000 = £54,000
    • £70,000 is the Consolidated Cost of Sales
    • You deduct the Sale to subsidiary
    • Work out the Unrealised profit and adjust the sale figure in respect to the additional data.
    Hope this helps.
  • Deaniedani
    Deaniedani Registered Posts: 26
    it did, thank you so much. =)
    Zoynal98
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