JUNE 2007 ACCOUNTING PAPER 1 Q 16.URGENT.

[arvind0708]

16 A company transfers manufactured items from factory to warehouse at cost plus 10 %. This year
the transfer value was $93 500 and at the end of the year the closing stock was 20 % of the
year’s production.
How will the stock of finished goods be shown?
Trading Account
$
Balance Sheet
$
A 17 000 17 000
B 18 700 16 830
C 18 700 17 000
D 18 700 18 700

 

[Roadster 125]

Assalam o allikum
SO in the MCQ It will be ...
For trading profit
Years production was = 93500
percentage of stock closing = 20*
so = 93500 *20% = 18700
THEN...
For balance sheet we take Ending Stock..
So..
For this we first Takeout the 10% from the Cost of production as 93500 was 110% transfered to trading account.
93500 *100 / 110 = 85000 ,
for balance Sheet it will be = 85000 * 20 / 100 = 17000.
Therefore , the Answer is option C
THANK YOU.. =)

 

[MAVtKnmJ]

@arvind0708

Why are you making all these new threads? You could have just made a single thread and then asked all of your Accounting related questions in that thread.

Kindly do that from now on.

Thanks!