Acca financial Accounting (FA) Study Text ac ca (FA)

What will be the provision for unrealised profit adjustment for the 

year ended 31 July 20X7, for the P group? 

A 

Deduct $500 from the cost of sales 

B 

Deduct $50 from the cost of sales 

C 

Add $50 to the cost of sales 

D 

Add $100 to the cost of sales 

120  P Co acquired 80% of the ordinary shares of S Co several years ago. 

During the year ended 31 March 20X7, S Co made a profit after tax of 

$25,000. During the year ended 31 March 20X7 S Co sold goods to P Co 

for $900, which included a mark-up of 50%. At the reporting date only one-

third of those goods had been sold by P Co.