Hello Tutor , for PYQ March/June 2017 Q31 Pangli Co,
for part a (ii) which is calculated the overdraft balance at the end of 20x7,why the inventory is excluded in the calculation ? as "Inventory is expected to increase by $52,250 during January 20X7."
Is it not part of payment / cash outflow?
Thank you.
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Pangli co
7y ago#1If the inventory increases in January, then this will be part of the purchases figure for
January of 250,000. The 250,000 affects payables, but doesn't affect the cash for January because the purchases are on credit.
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