CIMAPRA17-BA3-1 Exam - Topic 1 Question 71 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 71
Topic #: 1

A company's financial statements show a gross profit of $15 million. A major error in the inventory value system has been discovered resulting in an overstatement on opening inventory of $1.2 million and an understatement in closing inventory of $1.5 million.

What is the correct gross profit figure for the period?

A$17.7 million

B$15.3 million

C$14.7 million

D$12.3 million

Show Suggested Answer

Suggested Answer: B

by Cory at Jul 05, 2023, 04:15 AM

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Gregoria

3 months ago

I think it’s definitely $14.7 million, good catch!

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Destiny

3 months ago

So, $15 million minus $1.2 million plus $1.5 million equals $14.7 million, right?

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Robt

4 months ago

Wait, are we sure about those inventory adjustments? Seems off.

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Geraldo

4 months ago

Totally agree, the math checks out!

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Olga

4 months ago

The gross profit should be adjusted to $14.7 million.

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Janna

4 months ago

I’m really uncertain about this one. I thought inventory errors only affected the balance sheet, not the gross profit directly.

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Isreal

4 months ago

This reminds me of a practice question where we adjusted gross profit for inventory errors. I think the correct answer might be $15.3 million.

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Yen

5 months ago

I think we need to subtract the overstatement and add the understatement to the gross profit, but I can't recall the exact numbers.

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Queenie

5 months ago

I remember something about how inventory adjustments affect gross profit, but I'm not sure how to calculate the net effect here.

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Haydee

5 months ago

Hmm, I'm a little unsure about this one. I know objective forecasting needs to be based on more than just opinions, but I'm not sure if it's just facts or if some judgement is also involved.

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Cherrie

5 months ago

This seems like a tricky question. I'll need to think carefully about the reasons businesses might be wary of sending checks to vendors with only street addresses.

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Hortencia

5 months ago

I'm pretty confident that the answer is Service Continuity Management. That's the ITIL process that's responsible for ensuring the organization can continue to provide essential services during a disaster or major incident.

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Laurel

9 months ago

I heard the company's inventory was so messed up, they had to hire a professional 'lost and found' expert to find all the missing items. Guess they should have invested in a better inventory system, huh?

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Eladia

8 months ago

C) $14.7 million

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Merilyn

8 months ago

B) $15.3 million

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Rebecka

9 months ago

A) $17.7 million

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Iraida

9 months ago

Ah, the joys of financial accounting. I'm going with D) $12.3 million - let's hope I'm not cooking the books like the company in the question!

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Elena

9 months ago

Inventory - the bane of every accountant's existence! I'm feeling confident about A) $17.7 million, but I'll run the numbers one more time just to be safe.

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Janna

8 months ago

I'm not sure, but I think it might be C) $14.7 million. Can you explain your reasoning for A)?

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Graciela

8 months ago

I'm pretty sure it's A) $17.7 million. Let's go over the calculations together.

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Tamar

8 months ago

I'm leaning towards B) $15.3 million. Are you sure about A)?

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Willard

8 months ago

I think it's A) $17.7 million too. Let's double check.

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Von

10 months ago

Hmm, gotta love those inventory discrepancies. I'm leaning towards C) $14.7 million, but I'll double-check my work just to be sure.

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Charlene

8 months ago

User 3: Let's double-check our calculations just to be safe.

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Coral

8 months ago

User 2: I agree, it seems like the most logical choice.

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Providencia

9 months ago

User 1: I think the correct gross profit figure is $14.7 million.

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Jodi

10 months ago

Wow, talk about a major inventory issue! I'm going with B) $15.3 million - that seems to be the correct answer after accounting for the overstatement and understatement.

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