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Mini Exercises – Cost of Sales – Q2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Mini Exercises – Cost of Sales – Q2

Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 7, 2018 at 10:06 am #445437
    chrisi04
    Member
    • Topics: 49
    • Replies: 23
    • ☆☆

    I cannot understand the answer.

    How did you come up with the purchases figure please?

    Many thanks.

    Chri

    April 7, 2018 at 3:55 pm #445469
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Use basic algebra

    Let opening inventory be “x” and then go from there

    Post again if you need to!

    April 7, 2018 at 4:37 pm #445480
    chrisi04
    Member
    • Topics: 49
    • Replies: 23
    • ☆☆

    Thanks for the answer. I understood it.

    Now I am having issues with question 2. I cannot understand how to find the opening inventory, because now I have both opening and closing inventory missing.

    Kindly explain.

    Thanks

    April 7, 2018 at 4:49 pm #445483
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    If opening inventory is “x” then closing inventory must be “1.3x”

    And we know that opening inventory + purchases – closing inventory = cost of sales

    We know sales and we know gross profit margin so we can find a figure for cost of sales

    And therefore we can find “x”

    OK now?

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