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Hello. Please I wish to know how to easily determine the closing inventory, with the physical count done after the end of the period.
Example:
The inventory value for the financial statements of Global Co for the year ended 30 June 20X3 was
based on a inventory count on 7 July 20X3, which gave a total inventory value of $950,000.
Between 30 June and 7 July 20X6, the following transactions took place.
$
Purchase of goods 11,750
Sale of goods (mark up on cost at 15%) 14,950
Goods returned by Global Co to supplier 1,500
What figure should be included in the financial statements for inventories at 30 June 20X3?They need to know what the inventory was on 30 June.
Since the count was made on 7 July, then need to reverse whatever happened between 30 June and 7 July in order to find out what the inventory was on 30 June.
Since they had bought extra goods during the period, these need subtracting to find out what the inventory had been.
Since the had sold some goods during the period, these need adding (obviously at cost) to find out what the inventory had been.
Since they had returned some goods during the period, these also need adding to find out what the inventory had been.You should now be able to arrive at the answer (and presumably you have an answer in the same book in which you found the question).
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