The inventory value for the financial statements of ABC Co for the year ended 31 May 20X6 was based on a inventory count on 6 June 20X6, which gave a total inventory value of $190,000.
Between 31 May and 6 June 20X6, the following transactions took place.
$
Purchase of goods 2,350
Sale of goods (mark up on cost at 15%) 2,990
Goods returned by ABC Co to supplier 300
What figure should be included in the financial statements for inventories at 31 May 20X6 ?
Answer Ending Inventory = 190,000 – 2,350 + 300 + (2,990 x 100/115) = $190,550