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

Preparation of financial statements — practice question

A warehouse was hit by fire on 31 March, and part of the inventory was destroyed. The information below has been provided. Inventory at cost on 1 January $6000$ Inventory at cost on 31 March after fire $3200$ Sales during the period $14700$ Purchases during the period $9500$ The business applies a mark-up of $33.33\%$. What was the value of the inventory destroyed?

  • A$1275
  • B$1800
  • C$2000
  • D$2500

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