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The inventory value for the financial statement of Q for the year ended 31 December 2004 was based on an inventory count on 4 January 2005 , which gave a total inventory value of $836,200.
Between 31 December and 4 January 2005 , the following transaction took place:
Purchase of good $8600
Sales of goods (profit margin 30% on sales) $14000
Goods returned by Q to supplier $700What adjusted figure should be included in the financial statement for inventories at 31 December 2004?
A. $838100
B. $853900
C.$818500
D.$834300In order to calculate what the inventory was on 31 December, you need to work backwards from the value on 4 January.
So subtract the purchases (because they were not there on 31 December); add the cost of the sales (because they were there on 31 December), and add the returns (because they were there on 31 December).
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