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Pangli co

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

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November 6, 2018 at 7:58 am #483979
toushiga
Participant
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Hello Tutor , for PYQ March/June 2017 Q31 Pangli Co,
for part a (ii) which is calculated the overdraft balance at the end of 20×7,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.
November 6, 2018 at 2:10 pm #484016
John Moffat
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If 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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