[Issen]

I got it.
$980 is the only amount that will be affected by the decisions. the $20 will be invested indifferently.
Have a good day! 🙂

[Issen]

Hi Sir, I am confused on the below procedure performed to check the value/accuracy of inventory at the year-end:
Compare selling prices to those charged elsewhere. If the prices elsewhere are lower, then the distortion in selling price might affect the value of the inventory. Alternatively if the prices elsewhere are higher, then the company’s prices may occasionally fall below cost. Again any adjustment discovered to be necessary must be quantified.

Can you please explain it in a clearer way?

[Issen]

Thank you!

[Issen]

Thanks Mike, I’m bound to understand such a clear and nice example 😉

[Issen]

Its not very clear, but I guess both names should be used. But in part (a) to (c), it referred to the corporate name, hence both names.

[Issen]

Thanks a lot Mike!

[Issen]

Thanks Mike! 🙂

[Issen]

Wow, thanks Mike! You are so helpful!

[Issen]

Mark up of 20 % means cost is 100% and hence selling price is 120%. But then the calculation goes as follows:
selling price =120/100*1000=1200
and profit is 20% of 1000=200

[Author]

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