ACCA FA · Guided practice (Show me how)
Chapter 18: Mark-up and Margins
Inventory stolen - using a margin to find the missing figure
A business had opening inventory of $52,000, made purchases during the year of $240,000, and had sales during the year of $320,000.
There had been a theft late in the year, and the inventory counted at the end of the year was only $18,000.
If the business always earns a gross profit margin of 25% on its sales, then what was the cost of the inventory that had been stolen?
(a) Cost of sales
Calculate the cost of sales of the business for the year.
(b) The missing inventory
Calculate the closing inventory the business should have held at the end of the year, and the cost of the inventory stolen.
Opening this exercise…