Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

For one period, a business supplied the figures shown below. Sales revenue $1\,500\,000 Purchases $1\,000\,000 Inventory at end of the period $50\,000 During the period, the rate of inventory turnover was $12$ times and the business achieved a gross profit margin of $40\%$. The business also recorded some purchase returns and paid an amount for carriage inwards. What value of inventory was held at the start of the period?

  • A$100\,000
  • B$116\,667
  • C$128\,572
  • D$200\,000

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