ACCA F3 Incomplete
On 31 December 2014 the inventory of V was completely destroyed by fire. The following information is available.
1. Inventory at 1 December 2014 at cost $90,000
2. Purchases for December 2014 $17,120
3. Sales for December 2014 $25,680
4. Standard gross profit percentage on sales revenue 10%.
Based on this information, what is the amount of inventory destroyed?
Suggested solutions
COS = Sale X (1- gross profit margin)
COS = 25,680 X (1- 10 /100)
COS = 23,112
| Inventory 1 December 2014 | 90,000 |
| Add Purchase for December 2014 | 17,120 |
| Less COS | 23,112 |
| = Inventory 31 December 2014 | 84,008 |
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