A company with an accounting date of 31 October carried out a physical check of inventory on 4 November 20X2, leading to an inventory value at cost at this date of $241,850.
Between 1 November 20X2 and 4 November 20X2 the following transactions took place:
1Goods costing $19,200 were received from suppliers.
2Goods that had cost $7,400 were sold for $10,000.
3A customer returned, in good condition, some goods which had been sold to him in October for $300 and which had cost $200.
4The company returned goods that had cost $900 in October to the supplier, and received a credit note for them.
What figure should appear in the company’s financial statements at 31 October 20X2 for closing inventory, based on this information?
Answer
$
Inventory check balance ……………. 241,850
Less: goods from suppliers ………..(19,200)
Add: goods sold …………………………7,400
Less: goods returned ………………….(200)
Add: goods returned to supplier ….900
Closing Inventory ……………………230,750