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hi Sir ,
Sliver Co made sales of $193200 during the year ended 31 August X1 . Inventory decrease by $13200 over the year and all sales were made at a mark up of 42% .what was the cost of purchase during the year ,?
A. 123000
B. 149000the Ans is A . Why not B ?/
Thank you .
In future, if you wish me to answer you must ask in the Ask the Tutor Forum – this forum is for students to help each other.
The cost of sales is 100/142 x 193,200 = 136,056
Since the inventory decreased by 13,200, the purchases must have been 136056 – 13200 = 122856 (I assume that the question asked for the answer to the neared thousand)
I do suggest that you watch our free lecture on mark-ups and margins.
Our lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.hi Sir ,
Sry for disturb . why we should Minus our Purchase and not Opening Or Closing Stock ?As I wrote before, you must ask in the Ask the Tutor Forum if you want me to answer.
If the inventory decreases then some of the goods are being taken from inventory and only the remainder need to be bought.
Opening inventory certainly will not have been zero, and is irrelevant anyway.
The question says that the inventory decreases over the year and that is all that is needed.
(How on earth can inventory decrease if it started at zero!!)
Thank you for ur guidance…….. I pass my F3 with 90% … thank you so much for ur help… appreciate….. ??
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