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

8 months ago

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

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Destiny

8 months ago

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

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Robt

8 months ago

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

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Geraldo

9 months ago

Totally agree, the math checks out!

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Olga

9 months ago

The gross profit should be adjusted to $14.7 million.

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Janna

9 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

9 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

9 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

9 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

10 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

10 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

10 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

1 year 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

1 year ago

C) $14.7 million

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Merilyn

1 year ago

B) $15.3 million

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Rebecka

1 year ago

A) $17.7 million

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Iraida

1 year 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

1 year 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

1 year 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

1 year ago

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

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Tamar

1 year ago

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

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Willard

1 year ago

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

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Von

1 year 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

1 year ago

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

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Coral

1 year ago

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

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Providencia

1 year ago

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

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Jodi

1 year 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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