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- This topic has 6 replies, 4 voices, and was last updated 10 years ago by John Moffat.
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- June 20, 2014 at 10:48 am #177291
Hi ,
Would you be able to assist me with the following question below :
Silver Co made sales of $193,200 during the year ended 31 August X1. Inventory decreased by $13,200 over
the year and all sales were made at a mark up of 42%.What was the cost of purchases during the year, to the nearest $1,000?
I have worked out the cogs is 193200/1.42 = 136000 (to the nearest $1000)
Then I know that inventory decreases by 13200 , but after this I am slightly confusedI hope to hear from you soon & thank you in advance
June 20, 2014 at 1:56 pm #177305AnonymousInactive- Topics: 0
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Closing inventory reduces cost of sales, the difference between cost of purchase and cost of good sold can be explained from inventory movements. If there is a decrease in the movement of inventory, the cost of goods sold would be higher than the cost of purchases by the value of the decrease. a solution to your question would look like this. COGS. £136000 inventory reduced by £13200 therefore ur cost of purchase would be £122800
June 20, 2014 at 2:17 pm #177309Vicks:
Según is correct. The cost of what was sold was 136,000, but 13,200 came out of inventory and so only the remainder of 122,800 needs to be purchased.
Segun:
Thank you for answering. However this is the Ask the Tutor Forum, and you are not the tutor
Please restrict yourself to answering in the general F3 Forum.June 20, 2014 at 2:42 pm #177315June 20, 2014 at 3:23 pm #177317You are welcome
August 6, 2014 at 8:40 pm #186720sir I got 123000 to the nearest or 122000
122856.338August 7, 2014 at 6:58 am #186814Yes – to the nearest 1,000, the answer is 123,000.
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