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  1. Avatar of johnmoffat says

    C is correct.

    If sales were 281250, then cost of sales is 1/1.5 x 281250 = 187500.

    Goods available for sale were 432800, so closing inventory should have been 432800 – 187500 = 245300.
    Actual closing inventory was 204600, so lost inventory = 245300 – 204600 = 40700.

  2. avatar says

    Question: A sole trader fixes her prices by adding 50% to the cost of all goods purchased. On 31 October 20X3 a fire destroyed a considerable part of the inventory and all inventory records. Her trading a/c for the year ended 31 October included the following. $ $ Sales: 281, 250. Opening inventory at cost: 183,600. Purchases: 249,200. Goods available for sales. 432,800. Closing inventory. (204,600) COGS. 228,200 Gross profit 53,050. What inventory loss has occurred? A. $61,050 B. $87,575 C. $40,700 D. $110,850 (my calculations gave me A but the answer according to the revision kit is C)

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