Error in Neap Solutions 2007?

[Flaming_Arrow]

i think they have forgotten to add stock loss of $32000 to the P/L Summary , am i right?

[Fyrefly]

You're correct.

Entries in P+L Summary are
Total Rev: $268,700 CR
Total Exp: $265,900 DR
Capital: $2,800 DR

So their actual profit was only $2,800, not $34,800.

[Flaming_Arrow]

You're correct.

Entries in P+L Summary are
Total Rev: $268,700 CR
Total Exp: $265,900 DR
Capital: $2,800 DR

So their actual profit was only $2,800, not $34,800.

yep thats what i got thanks

[andrew4443]

I pretty sure the solutions are correct, but this was a really badly worded question IMO.

If you look at the question it says "The following has not yet been recorded"

2. The owner took a car from stock, which cost 32,000, for his personal use.
Since it says this hasn't been recorded yet, you would obviously debit drawings and credit stock control 32,000. This would reduce the balance of the stock control to 468,000, meaning neither a stock loss or gain has occurred (which would make sense considering the business is a car dealership)

I may be wrong tho..

[Fyrefly]

I pretty sure the solutions are correct, but this was a really badly worded question IMO.

If you look at the question it says "The following has not yet been recorded"

2. The owner took a car from stock, which cost 32,000, for his personal use.
Since it says this hasn't been recorded yet, you would obviously debit drawings and credit stock control 32,000. This would reduce the balance of the stock control to 468,000, meaning neither a stock loss or gain has occurred (which would make sense considering the business is a car dealership)

I may be wrong tho..

It's a car dealership??

Oh... I jst thought it was an ordinary 'motor vehicle' asset.

In that case, the solutions (and you andrew) are correct.

[Flaming_Arrow]

oh yes, didnt pick up on that, thanks