Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

The company’s year-end is 31 December. On that date, its inventory records indicated 600 units of inventory at a cost of $\$10$ per unit. On 31 December, a fire completely destroyed 100 units and left another 50 units damaged. Repairing these would cost $\$7$ per unit. No adjustment had been made to the inventory records for the fire. The selling price is $\$15$ per unit. What inventory value should be shown in the financial statements at 31 December?

  • A$\$4500$
  • B$\$4850$
  • C$\$4900$
  • D$\$5400$

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI