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

Preparation of financial statements — practice question

At 1 January 2022, the inventory of a sole trader was worth $4500. A fire broke out in his business premises on 14 April 2022. By 14 April 2022, his sales had reached $24600 and his purchases totalled $16700. He used a mark-up of $33\frac{1}{3}\%$. Goods with a cost of $1485 were rescued from the fire. Included in these were some items that had cost $800 but, because of the fire damage, can now be sold only for $650. Calculate the business's total inventory loss.

  • A$1115
  • B$1265
  • C$1415
  • D$2750

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