Calculating Ending inventories ( video below)

The inventory value for the financial statements of ABC Co for the year ended 31 May 20X6 was based on a inventory count on 6 June 20X6, which gave a total inventory value of $190,000.

Between 31 May and 6 June 20X6, the following transactions took place.

$

Purchase of goods   2,350

Sale of goods (mark up on cost at 15%)   2,990

Goods returned by ABC Co to supplier    300

What figure should be included in the financial statements for inventories at 31 May 20X6 ?

Answer

Ending Inventory = 190,000 – 2,350 + 300 + (2,990 x 100/115) = $190,550

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