chapter 18 test 5

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May 5, 2015 at 12:22 am #244087
Jarmarie
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how could the answer be A.185 000
opening inventory is 380000
purchases is 480000
sales is 500000 (650000/130) x 100
the closing inventory should be 360000,
instead it is 220000 so 140 was destroyed in the fire. how did you get 185000
May 5, 2015 at 8:27 am #244133
John Moffat
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You have asked this also as a comment to the lecture and I have answered you there.
185,000 is correct.
There is a margin of 30% and so the cost of sales is 70% of 650,000 (and not 650,000/130 – that would only be correct if the question said there was a mark-up of 30%).
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