Inventories

Question Number 187

In preparing financial statements for the year ended 31 March 2016, the inventory count was carried out on 4 April 2016. The value of inventory counted was $ 36 million. Between 31 March and 4 April, goods with a cost of $ 2.7 million were received into inventory and sales of $ 7.8 million were made at a mark-up on cost of 30%.

At amount should inventory be stated in the statement of financial position as at 31 March 2016 ?

Ans $39.3 million

                                                      $m
Per inventory count.                       36.0
Received after year end.                  (2.7)
Sold after year end(7.8m/1.3).           6.0
                                                          39.3

Can u please explain why they have divided 7.8 by 1.3?