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# Inventory

A level and AS level

➡️QUESTION⬅️

A business values their inventory using the AVCO method. The inventory on 1 June 2017 was 100 units valued at \$2.40 each.

The following took place.

June 5 purchased 40 units at \$2.50 per unit 7 sold 60 units at \$3.50 per unit

What was the value of the inventory on 8 June 2017 to the nearest dollar?

A \$194
B \$196
C \$200
D \$224

➡️QUESTION⬅️

Adam records his inventory using the AVCO (perpetual inventory) to calculate its value.

Which statement is correct?

A He only values it at the end of the month.
B He only values it at the year-end.
C He values it at the same price throughout the year.
D His inventory is valued after every purchase and issue.

➡️QUESTION⬅️

How is the issue of inventory from stores valued when using FIFO?

A Itis calculated using the average purchase price of goods.
B It is calculated using the price paid for the earliest delivery of goods.
C it is the same as the current replacement cost.
D It is the same as the most recent price paid for the goods.

➡️QUESTION⬅️

A company has a year-end of 31 December.

Its inventory records on that date showed an inventory of 600 units with a cost of \$10 each.

A fire on 31 December had totally destroyed 100 units and caused a further 50 units to be damaged.

These would cost \$7 each to be repaired.

The inventory records had not been adjusted for the fire. The selling price is \$15 per unit.

What is the value of the inventory to be used in the financial statements at 31 December?

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

➡️QUESTION⬅️

At the year-end, a business has some damaged goods in inventory. The following information is available.

1 The goods were purchased for \$8500.

2 If the goods are repaired, they can be sold for \$10400. The business will have to pay \$2000 repairing cost and pay \$300 to a salesman.

3 The same quantity of damaged goods can be purchased from the supplier for \$8200.

What is the value of the damaged goods at the year-end?

A \$8100
B \$8200
C \$8400
D \$8500

➡️QUESTION⬅️

Sam was unable to conduct a physical count of inventory at 31 December 2016.

On 3 January 2017 inventory had been sold to Abdul for \$11 950. The cost price of this inventory had been \$9560.

On 4 January 2017 inventory had been returned by Sita. It had been sold for \$2390. The cost price of this inventory was \$1912.

Sam valued his inventory at 5 January 2017 at cost, \$59 750.

What was the value of inventory at 31 December 2016?

A \$50190
B \$52012
C \$67398
D \$69310

➡️QUESTION⬅️

At the beginning of the financial year inventory was valued at \$15000. During the year, sales of \$21 000 and purchases of \$18000 were made. Unfortunately, all inventory was stolen on the last day of the financial year.

Goods are marked up by 50% to calculate selling price.

What is the cost of the stolen inventory?

A \$7500
B \$11000
C \$19000
D \$22500

➡️QUESTION⬅️

Which statements about valuing inventory are correct?

1. Any charges for carriage inwards should be included in its cost.

2 Cost should always be compared with the net realisable value.

3. Cost should always be compared with replacement price.

A 1,2and3
B 1and2only
C 1and3only
D 2and3only

➡️QUESTION⬅️

A business has 500 items of inventory at a cost price of \$3 each. The selling price per unit is based on a mark-up of 20%. Before sale, the items need to be repaired at a total cost of \$400.

What is the net realisable value of the inventory?

A \$1400
B \$1475
C \$2200
D \$2275

➡️QUESTION⬅️

The draft financial statements for a business included an inventory valued at \$550 000.

This valuation included damaged items which originally cost \$50000. These could be sold for \$15000 provided that \$5000 is spent on repairs.

What is the correct inventory valuation?

A \$490000
B \$500000
C \$510000
D \$515000