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4. Lee purchased some inventory at a cost of 100000( excluding sales tax) it cost 3000(excluding sales tax) to transport inventory to lee’s premises and he paid 10000 non-recoverable sales tax. In addition when inventory is sold it will cost lee 1000 to deliver the item to his customer’s premises. Lee always makes a large profit on his transactions and he always offersfree delivery to his customers. Calculate value of inventory included in financial statement ?
There is no point in simply setting test questions here and expecting an answer. You must have an answer in the same book in which you found the question and so you should ask about whatever it is in the answer that you are not clear about – then I will explain.
Everything needed to be able to answer this question is covered in our free lectures. The lectures are a complete free course for Paper F3 (FA) and cover everything needed to be able to pass the exam well.
Do we need to add 3000 in cost of purchases and subtract 1000 delivery expense ?
Like,
100,000 +3000+10,000-1000=112,000
Is this the way we are going to calculate this?No – we do subtract 1,000. Otherwise it is correct.
Have you not watched my free lectures?
The inventory is valued at the lower of cost and net reliable value.Please read my original reply. You must have an answer in the same book in which you found the question and you must ask about whatever it is in the answer that you are not clear about.
If you have been set it as a test question then we do not provide answers to test questions.Have you watched the free lectures yet?
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