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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,
IDTry using basic algebra and let opening inventory be “x”
Let me know if you’re still struggling
OK?
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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?
If 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?
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