Valuation of inventory

At the close of the financial year, Cindy recorded her inventory at cost. This figure wrongly included damaged goods with a cost of $300. Cindy thought that these goods would only be able to sell for $100. What effect will correcting the inventory valuation have?

Feb/March 2020

In calculating the value of his closing inventory, Asim left out goods with a cost of $990. What effect will this error have?

Feb/March 2023

In the statement of financial position of a manufacturing business, where is work-in-progress recorded?

Feb/March 2023

Which asset is measured at the lower of cost and net realisable value?

Feb/March 2024

Why might a bakery business not show a value for stationery inventory in the statement of financial position?

Feb/March 2024

The table lists the sports shop’s inventories at the year end. football kits: cost $250$, net realisable value $230$ tracksuits: cost $210$, net realisable value $240$ football boots: cost $160$, net realisable value $200$ Which value for inventories appears in the statement of financial position?

Feb/March 2025

Medway social club operates a café for its members. For the year ended 31 December, sales amounted to $15000$ and the cost of goods sold totalled $12000$. The closing inventory of coffee was recorded at a cost value of $1000$ but had deteriorated so that its worth was $500$. What profit from the café should be transferred to the income and expenditure account?

Feb/March 2025

In what way should inventory be valued?

May/June 2021

A trader supplied the information below. Revenue: $\$120\,000$ Inventory at the beginning of the year: $\$9\,600$ Inventory at the end of the year: $\$10\,200$ A mark-up of $25\%$ is used. What were the purchases for the year?

May/June 2021

Why might a bakery business leave out a value for stationery inventory in the statement of financial position?

May/June 2021

In what way should inventory be valued?

May/June 2021

Why might a bakery business exclude any value for stationery inventory from the statement of financial position?

May/June 2021

In what way ought inventory to be valued?

May/June 2021

While drawing up his financial statements, a trader valued his inventory at cost. He later discovered that $10$ units of inventory, with a cost of $12$ per unit, had been damaged. If he paid $2$ per unit for repairs, he would be able to sell them for $9$ each. What effect would the incorrect inventory valuation have on the income statement?

May/June 2022

Jerry launched his business on 1 January 2022 with no opening inventory. A fire completely destroyed all of his inventory on 19 April 2022. For the period from 1 January 2022 to 19 April 2022, Jerry gave the following figures. revenue: $30\,200$ purchases: $25\,600$ gross margin: $25\%$ What amount of inventory was destroyed on 19 April 2022?

May/June 2022

Once the financial statements for the year ended 30 April 2022 were completed, a trader found that closing inventory had been overstated. What effect will this error have?

May/June 2022

Tahir gave the following figures for his first year of trading: sales $170 000; sales returns $6000; purchases $129 000. Tahir’s gross margin was 25%. What was the value of closing inventory?

May/June 2022

A business supplied the following figures: inventory at the start of the year $6800; inventory at the end of the year $6000; rate of inventory turnover 5 times. What were the purchases for the year?

May/June 2022

Once the financial statements for the year ended 30 April 2022 had been prepared, a trader realised that the closing inventory had been overstated. What effect will this error have?

May/June 2022

For Tahir’s first year of trading, the information given was: sales $170\,000; sales returns $6000; purchases $129\,000. Tahir’s gross margin amounted to $25\%$. What was the value of closing inventory?

May/June 2022

Ekua trades in household furnishings and has supplied the figures below. At 30 April 2022: Inventory $14650 Trade receivables $12700 Bank overdraft $5375 Trade payables $7125 For the year to 30 April 2022: Revenue $112300 Purchases $72250 Expenses $19820 All sales and purchases are on credit. Inventory at 1 May 2021 was valued at $12800.

May/June 2022

Nala trades in stationery, buying and selling it. She gave the following figures for her inventory as at 28 February 2022.

May/June 2022

Nala trades in stationery. She gave the following details about her inventory at 28 February 2022.

May/June 2022

When the financial year ended, Gina had the following clothing items in her inventory: - 100 t-shirts: cost price per unit $15, selling price per unit $30 - 200 dresses: cost price per unit $40, selling price per unit $30 What total value did Gina’s inventory have?

May/June 2023

Asha gave the following details about her inventory at the close of the financial year. Product P: 200 units, cost price per unit $2.50, selling price per unit $2.00. Product J: 300 units, cost price per unit $3.00, selling price per unit $3.50. What was the overall value of Asha’s inventory?

May/June 2023

Asha gave the following details for her inventory at the close of the financial year. Product P: number of units $200$, cost price per unit $2.50$, selling price per unit $2.00$. Product J: number of units $300$, cost price per unit $3.00$, selling price per unit $3.50$. Calculate the total value of Asha’s inventory.

May/June 2023

Why is inventory measured at the lower of cost and net realisable value?

May/June 2024

At the close of the financial year, Cindy measured her inventory at cost. This figure wrongly included damaged goods with a cost of $300. Cindy assessed that these goods would fetch $100 if sold. What effect would correcting the inventory valuation have?

May/June 2024

A business applies a 20% mark up when setting its selling prices. Over the year, it recorded purchases of \$3500, and its inventory fell from \$7000 to \$2000. What was the revenue for the year?

May/June 2024

Alex bought goods that cost $1000. She intended to resell them with a mark-up rate of $25\%. By the year end, the goods had not been sold and were discovered to be damaged. Alex judged that they could be sold for $600. What value ought to be reported for these goods in the year-end financial statements?

May/June 2024

During Roshan’s first year of trading, sales amounted to $55\,000$. The gross profit margin was $20\%$. Closing inventory stood at $3\,200$. Calculate the purchases for the year.

May/June 2024

Alex bought goods for $1000. She intended to sell them on at a mark-up of $25\%$. By the year end, these goods had not been sold and were discovered to be damaged. Alex assessed that they would be worth $600 if sold. What amount should be reported for these goods in the year-end financial statements?

May/June 2024

In Roshan’s first year of trading, sales came to $55\,000$. His gross profit margin was $20\%$. Closing inventory was $3\,200$. What were the purchases for the year?

May/June 2024

How ought a business to value its inventory?

May/June 2025

A trader supplied the details below. Revenue $120\,000$; inventory at the start of the year $9\,600$; inventory at the end of the year $10\,200$. A 25% mark-up is used. What were the year's purchases?

May/June 2025

Tony has drawn up an inventory valuation statement at the close of the financial period. Inventory items and amounts: - cricket bats, cost $600, net realisable value $750 - cricket gloves, cost $400, net realisable value $320 - cricket helmets, cost $900, net realisable value $1200 - cricket pads, cost $300, net realisable value $240 What is the value of Tony’s inventory?

May/June 2025

What method should a business use to value its inventory?

May/June 2025

Nirmal has two products, product G and product H. At the close of the financial year, the inventory information is as follows: - Product G: quantity of units $1000$, cost price for each unit $2.00$, net realisable value for each unit $2.50$ - Product H: quantity of units $800$, cost price for each unit $1.50$, net realisable value for each unit $1.20$ It was discovered that $100$ units of product G had been damaged and could not be sold. What was the total value of Nirmal’s inventory?

Oct/Nov 2020

Kate worked out her provisional profit for the year as $28\,400$. She then found these mistakes: 1. The rent prepaid by Kate had been underrecorded by $1000$. 2. Closing inventory had been underrecorded by $1500$. What should the profit for the year actually have been?

Oct/Nov 2020

Nirmal has two products in stock, product G and product H. The information below shows his inventory at the end of the financial year. Product G: 1000 units, cost price per unit $2.00$, net realisable value per unit $2.50$. Product H: 800 units, cost price per unit $1.50$, net realisable value per unit $1.20$. It was discovered that 100 units of product G had been damaged and could not be sold. What was the total value of Nirmal’s inventory?

Oct/Nov 2020

Nirmal trades in two items, product G and product H. The information below shows the inventory he held at the end of the financial year. Product G: number of units $1000$, cost price per unit $\$2.00$, net realisable value per unit $\$2.50$. Product H: number of units $800$, cost price per unit $\$1.50$, net realisable value per unit $\$1.20$. It was discovered that $100$ units of product G had been damaged and were unsaleable. What is the total value of Nirmal’s inventory?

Oct/Nov 2020

In Roshan’s first year of trading, his sales totalled $\$55\,000$. His gross profit margin was $20\%$. The closing inventory was $\$3200$. What were the purchases for the year?

Oct/Nov 2021

When Lucy had drawn up the draft financial statements at the close of her first year of trading, she found two mistakes. 1 Inventory that had been damaged had been recorded at cost price, $340. It was expected to be sold for $180. 2 100 items that were expected to sell at $12 each had been recorded at their cost price of $7 each. Carriage inwards of $1 for each item had not been added to the cost. What effect did these mistakes have on gross profit?

Oct/Nov 2021

In Roshan’s first year of trading, sales amounted to $55000$. His gross profit margin was $20\%$. Closing inventory was $3200$. Calculate the purchases for the year.

Oct/Nov 2021

A trader gave the following details about his inventory at the end of his financial year. total number of units: 500 cost price of each unit: $4 net realisable value of each unit: $6 80 units had been damaged and could only be sold for $3 per unit. What is the value of the closing inventory?

Oct/Nov 2022

Why is inventory valued at the lower of cost and net realisable value?

Oct/Nov 2022

A trader supplied the following details about inventory at the end of his financial year. total number of units: $500$ cost price of each unit: $4$ net realisable value of each unit: $6$ $80$ units had been damaged and could only be sold for $3$ per unit. What was the value of the closing inventory?

Oct/Nov 2022

Thabo supplied the following data: revenue amounting to $250000, a gross margin of $20\% and an inventory turnover rate of 5 times. What was the average inventory for the year?

Oct/Nov 2022

During the year, Toby bought goods costing $13000. His closing inventory exceeded his opening inventory by $1000. Toby’s gross margin is 20%. What was Toby’s revenue for the year?

Oct/Nov 2023

Ariadne draws up her financial statements up to 31 December every year. On 31 December 2021, she recorded all of her inventory at cost, although some inventory that cost $500$ had a net realisable value of $350$. What impact did this mistake have?

Oct/Nov 2023

Toby spent $13000$ on purchases during the year. His closing inventory was $1000$ greater than his opening inventory. Toby’s gross margin is $20\%$. Find Toby’s revenue for the year.

Oct/Nov 2023

Once Lucy had completed the draft financial statements at the end of her first year of trading, she found two mistakes. 1. Damaged inventory had been recorded at cost price of $340$. It was expected to be sold for $180$. 2. $100$ items that were expected to be sold for $12$ each had been valued at cost price of $7$ each. Carriage inwards of $1$ for each item had not been included in the cost. What impact did these errors have on the gross profit?

Oct/Nov 2024

What effect would overstating the value of closing inventory have on total assets and equity in the statement of financial position?

Oct/Nov 2025

A company gave the information below about its closing inventory. cost price: $35 per unit (this includes carriage inwards of $2 per unit) net realisable value: $48 per unit Which unit value should the company choose when valuing its closing inventory?

Oct/Nov 2025