The inventory value for the financial statements of Global Co for the year ended 30 June 20X3
was based on a inventory count on 7 July 20X3, which gave a total inventory value of $950,000.
Between 30 June and 7 July 20X3, the following transactions took place.

$
Purchase of goods 11,750
Sale of goods (mark up on cost at 15%) 14,950
Goods returned by Global Co to supplier 1,500
What figure should be included in the financial statements for inventories at 30 June 20X3?
$_______ (2 marks)

To determine the correct inventory value for the financial statements of Global Co as of 30 June 20X3, we need to adjust the inventory value counted on 7 July 20X3 by accounting for the transactions that took place between 30 June and 7 July 20X3.

### Inventory value on 7 July 20X3:
- **Counted Inventory Value on 7 July 20X3:** $950,000

### Adjustments:

1. **Purchase of goods (between 30 June and 7 July):**
   - These goods were not part of the inventory on 30 June 20X3 but are included in the inventory counted on 7 July 20X3. Therefore, this amount should be subtracted.
   - **Amount:** $11,750

2. **Sale of goods (between 30 June and 7 July):**
   - These goods were part of the inventory on 30 June 20X3 but were sold before 7 July 20X3, so their cost should be added back to the inventory value.
   - The sales amount provided includes a markup of 15% on cost. To find the cost of these goods, we calculate:
   \[
   \text{Cost of goods sold} = \frac{\text{Sale amount}}{1 + \text{Markup percentage}} = \frac{14,950}{1.15} = 13,000
   \]
   - **Amount to add:** $13,000

3. **Goods returned by Global Co to supplier (between 30 June and 7 July):**
   - These goods were part of the inventory on 30 June 20X3 but were returned before 7 July 20X3. Therefore, this amount should be added back to the inventory value.
   - **Amount to add:** $1,500

### Calculation:
\[
\text{Adjusted Inventory Value} = 950,000 - 11,750 + 13,000 + 1,500 = 952,750
\]

### Conclusion:
The figure that should be included in the financial statements for inventories at 30 June 20X3 is **$952,750**.

Would you like more details or have any questions?

Here are some related questions:
1. What would happen if the purchase amount was different?
2. How would a different markup percentage affect the cost of goods sold?
3. What if some goods were returned by customers instead of Global Co?
4. How does the timing of transactions affect inventory valuation?
5. What other adjustments might be needed if there were additional transactions?

**Tip:** Always ensure that all post-period transactions affecting inventory are properly accounted for when adjusting inventory values for financial statements.

Understand how to calculate the correct inventory value for financial statements using the example of Global Co. Learn about adjustments for purchases, sales with markup, and goods returns. Includes a detailed step-by-step solution and relevant formulas.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation