FSLC Test 2 AAT Task 6

sophie_612

Hi,

Can someone please help me understand how they got the two answers highlighted in yellow?

Thanks
Sophie

CornishPixie

Morning Sophie

Ok, so the 211 is simply the 186 and 25 additional income from the two companies

The -495 relates to the cost of sales. For Lund it is £12454 and For Visby it is £3245 = total £15699. But our answer to cost of sales in table 1 = £15204. It simply £15204 - £15,699 = -495

CornishPixie

And if anyone is struggling on how to get 15204 for cos in table 1, then:

Goods cost - £440,000
Goods sold for - £550,000
£550,000 - £440,000 = £110,000 realised profit
We are told that half of these goods remain in inventory so therefore, £110,000 / 2 = £55,000 unrealised profit
Take the £440,000 + £55,000 = 495,000 intercompany adjustment for cost of sales.

So it has to be a -£495,000 (0r -495 as the table is in 000's

sophie_612

@CornishPixie thank you so much for explaining it to me thats helped loads