Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Mini Exercises – Question 2
- This topic has 4 replies, 2 voices, and was last updated 5 years ago by MikeLittle.
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- May 5, 2018 at 8:35 pm #450242AnonymousInactive
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Can you please explain how the Opening inventory was solved in question 2.
the solution does not have a detailed explanation.
Thanks,
IDMay 5, 2018 at 8:58 pm #450243Try using basic algebra and let opening inventory be “x”
Let me know if you’re still struggling
OK?
May 5, 2018 at 9:30 pm #450249AnonymousInactive- Topics: 2
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I did not get it still. The opening and closing inventory was not given only the Purchases.
Kindly explain.
Question
His rival down the road achieves a GM of 15%. His closing inventory was 30% higher than the opening inventory. sales in the year were $450,000 and purchase $400,000.what is the opening inventory?
May 6, 2018 at 5:25 am #450267If opening inventory is “x”, then closing inventory must be “1.3x”
We can calculate cost of sales as “.85 * sales” = .85 * 450,000 = 387,500
And cost of sales itself is the result of “opening inventory + purchases – closing inventory”
So now we have “x + 400,000 – 1.3x = 387,500”
Now can you take it further?
May 8, 2018 at 7:52 am #4505522 days and no response – I’m closing the thread
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