2007 September exam Q20

[DevonMatthews]

Why does the solution round figures off here? And it's not by just a little bit either, since the figures are in the thousands .5 equates to a 500 pound difference.

Also it's interesting to note They rounded the cost of sales DOWN which increases the net profit. If you're going to start rounding things off like that doesn't that violate the concept of prudence, since the HIGHEST resonable figure should be stated for sales, inorder to state the "lowest" resonable figure for profits?

 

[Lynn Birchall]

Hi

It's perhaps worth mentioning that either rounded or unrounded figures would be fine in answering this question in the exam...

Personally, I'd always stick with unrounded as I think it's easier to make sure things balance properly that way

 

[Polina Hadjipanayiotou]

Hi everyone,

how come for the balance sheet the aggregate depreciation for Premises is 77,000, instead of 78,000 (48,000 depreciation from profit statement plus 30,000 given in the question) ?? I get 4,148,000 for Total assets instead of 4,149,000 like in the question and my balance sheet doesnt balance.

Thanks in advance

 

[Simon James]

Hi everyone,

how come for the balance sheet the aggregate depreciation for Premises is 77,000, instead of 78,000 (48,000 depreciation from profit statement plus 30,000 given in the question) ?? I get 4,148,000 for Total assets instead of 4,149,000 like in the question and my balance sheet doesnt balance.

Thanks in advance

It should be 78,000. It is easier to make everything balance if you do not round.

 

[Polina Hadjipanayiotou]

It should be 78,000. It is easier to make everything balance if you do not round.

Thank you very much sir