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Revision thread - Accounting (AQA) Unit ACCN2 - 16 January 2012 (pm)

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898 760 (1) 898 760 (1) cost
+ 43 586 (1) + 43 586 (1) stock
- 45 000 (1) - 31 414 (2) net realisable value
+ 13 586 (1)
910 932 (1)OF

june 2011
trust me net profit mattlismore and sukhys youve got it wrong!!!!!!!!!!!!!

how can they not include the initial cost value and subtract the net realisable value, thats not logical!!!!!!!!!!!!!!

youve got to add the cost and subtract the net realisable value !
its speaking like ive got 100 pound i had 50 pound seperate and some notes were messed up

so youd do 100 +50 -notes messed up !!!!!!!

150-x =Value
your wrong and you know it
Original post by sukhys
actually i did NRV, try and get the paper. then we can see.


logic tells you it cant be net realisable value on its own !

youve got to add cost on before you subtract net realisable away, good fight 5 marks and final answer wrong :d
bump.. anyone get hold of the paper?
bump anyone get hold of the paper????????????
Reply 106
Avatar for A.A.T.
A.A.T.
OP
ACCN2 Jan 2012 - paper available
AQA-ACCN2-QP-Jan12.pdf200.0KB
Reply 107
Avatar for sukhys
sukhys
2
Original post by A.A.T.
ACCN2 Jan 2012 - paper available


thanks AAT, when will you get hold of the unit 3 paper. captivity of negativity the paper is here. be patient.
i dont give a damn dont private message me , your wrong youve got to add the stock on first then take away the net realisable value look at the past papers you fool
On 30 September 2011, Harry carried out a physical stocktake. Some goods which
had originally cost £2800 had been damaged. These goods could be repaired at a
cost of £580 and could then be sold for £3200.

2800+closing stock - 2620 fail
Reply 110
Avatar for sukhys
sukhys
2
Original post by Captivity of negativity
i dont give a damn dont private message me , your wrong youve got to add the stock on first then take away the net realisable value look at the past papers you fool


listen the closing stock was 14682. this included damaged stock of 2800.

so you do nrv =3200 - 580 = 2620
u value stock at cost or NRV whichever is lower.

so the nrv is lower so that means your closing stock will go lower. which also means your gp will go lower.

so you get 14682 - 2800 + 2620 = 14502.
in the june 2011 they did something different as we were dealing with cost of sales.
do u understand if not ask AAT.
man i got it wrong i give up/
good fight net profit figure/
Reply 113
Avatar for sukhys
sukhys
2
Original post by Captivity of negativity
man i got it wrong i give up/


finally! how many posts did u say that i was wrong, next time think before you reply. :mad:
Reply 114
Avatar for sukhys
sukhys
2
Original post by Captivity of negativity
good fight net profit figure/


lool my net profit was 19262. just did the income statement now, pretty sure thats what i put in the exam.
i still got gearing right mate
wahahahahha 1.17;1 keep hating
man chill ! do the gearing ratio? do you add profit and loss account back on?
i put 19,166 youve got soin dody there bro
Reply 118
Avatar for sukhys
sukhys
2
Original post by Captivity of negativity
i put 19,166 youve got soin dody there bro


the gearing i got 53.9%

i did long term liabilities/captial + reserves + long term liabilities x 100

in the capital and reserves i included the profit after tax of 2,000,000

my np is correct for question 2, pretty sure.
Reply 119
Avatar for A.A.T.
A.A.T.
OP
Ref: Closing inventory adjustment.

Regarding Harry Knight question and the value of closing inventory.

Information from the question includes:

"The following additional information was overlooked when preparing the draft income statement (trading and profit and loss account).". This can either mean something has been missed out completely or incorrectly treated.

Point (3) states "On 30 September 2011, Harry carried out a physical stock take. Some goods which had originally cost £2800 had been damaged. These goods could be repaired at a cost of £580 and could then be sold for £3200."

The fact that Harry carried out the physical stock take indicates he would have counted the "damaged" inventory as undamaged (not noticing they were damaged) as they are assets and are in the business to account for so were included.

We have the value of £14 682 in the draft income statement so:
a) Did Harry include stock at cost: £2800? (Most likely)
b) or did Harry include inventory at NRV? (No!)
c) or neither given some values were "overlooked". (Maybe)

The physical evidence of stock would mean it is included and at cost.

The "overlooked information" would most likely refer to overlooking that the inventory was damaged.

Adjustment therefore is to remove inventory at cost and include at NRV (expected sale value - cost of repairs).

I believe in the time constraint of the exam many would take a guess and probably over-think the question.

So the main question is did he overlook including any amount related to these goods or not? The reason to support this point is that other points in the list 1-7 were also missed out having been "overlooked". Why should this point be any different?

Note overlooked does not necessarily mean "missed out" :-)

(English lesson=)
Overlooked:
Fail to notice (something).
Ignore or disregard (something, esp. a fault or offense): "she overlooks his faults".


NRV =3200-580 = 2620.
14682-2800+2620 = £14,502.

Summary
Given the paper I suspect it was the case that some damaged inventory was overlooked when valuing closing inventory expecting you to remove this value and include the correct value, rather than testing which value to simply choose and include.

Hope this is useful.

A.A.T
(edited 12 years ago)

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