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The inventory value for financial statements of X for the year ended 31 May 2008 was based on an inventory count on 4th June 2008 gave a total inventory value of $836200.
Between 31 May and June 4 2008 the following transactions took place:
Purchase of goods $8600
Sale of goods( profit margin 30 % on sales) $14000
Goods returned by X to supplier $700
What adjusted figure should be included in the financial statements for inventories at 31 May 2008?
Can i see a calculation for this please?If the inventory at 31 May was $X, then by the time we get to 4 June, it would have increased because of the purchases of $8,600. It would have decreased by the cost of the goods sold (70% x 14,000 = $9.800) and it would have decreased by the goods returned of $700.
We know what the inventory was at the 4 June, and so we need to work backwards to find out what it was on 31 May.
836,200 + 700 + 9,800 – 8,600 = $838,100
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