The inventory value for the financial statements of ABC Co for the year ended 31 December 20X7 was based on an inventory count on 9 January 20X8, which gave a total inventory value of $209,050.
Between 31 December and 9 January 20X8, the following transactions took place:
| $ | |
| Purchases of goods | 2,150 |
| Sales of goods (profit margin 25% on sales) | 3,500 |
| Goods returned by ABC Co to supplier | 175 |
What adjusted figure should be included in the financial statements for inventories at 31 December 20X7?
Answer
| $ | |
| Inventory count value | 209,050 |
| Less: purchases | (2,150) |
| Add: sales (3,500 x 75/100) | 2,625 |
| Add: goods returned | 175 |
| Inventory figure | 9,700 |