FSLC Test 2 AAT Task 6

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sophie_612
sophie_612 Registered Posts: 136 Dedicated contributor 🦉
in Financial Statements for Limited Companies
Hi,

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

Thanks
Sophie

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  • CornishPixie
    CornishPixie Registered Posts: 115 Dedicated contributor 🦉
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    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
    CornishPixie Registered Posts: 115 Dedicated contributor 🦉
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    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
    sophie_612 Registered Posts: 136 Dedicated contributor 🦉
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    @CornishPixie thank you so much for explaining it to me thats helped loads

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