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10.3 At 31 March 20X2 a company had oil in hand to be used for heating costing $8,200 and an unpaid
heating oil bill for $3,600.
At 31 March 20X3 the heating oil in hand was $9,300 and there was an outstanding heating oil bill of
$3,200.
Payments made for heating oil during the year ended 31 March 20X3 totalled $34,600.
Based on these figures, what amount should appear in the company’s statement of profit or loss and
other comprehensive income for heating oil for the year?
A $23,900
B $36,100
C $45,300
D $33,100The correct answer is D.
but I did not understand about the two scenario;
one is heating cost $ 8,200 at 31 Mar 20×2
and another is heating cost $ 9,300 at 31 Mar 20×3.May you please clarify these for me?
Thank you sir!
The 8,200 and the 9,300 are the inventories of heating oil and the start and end of the year.
What the question requires is the cost of heating oil actually used during the year.
So there are two steps involved.First you need to calculate how much the actually bought. You know how much they paid, and how much was owing at the start of the end of the year, and so you can calculate how much they purchased.
Second, you need to take the amount they purchased and adjust for the opening and closing inventories in order to calculate how much they actually used.
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