Home For AAT student members AQ 2016 Foundation Certificate in accounting General discussion - Foundation level
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Confused

Hi, i have a question to find the closing inventories, but i don't understand how the answer is £90,600.

- Sales revenue = £306,000
- Opening inventories = £140,000
- Gross profit = £116,000
- Purchases were 74% of COGS

I worked it out but i keep getting the wrong answer.

Comments

  • cmcdcmcd Registered Posts: 14
    Sales revenue - COGS = Gross profit
    £306,000 - COGS = £116,000
    COGS = £190,000

    COGS = Opening inventories + Purchases - Closing inventories
    £190,000 = £140,000 + (£190,000 x 74%) - Closing inventories
    Closing inventories = £140,000 + £140,600 - £190,000
    Closing inventories = £90,600
    Clintm15Maths3030
  • Maths3030Maths3030 Registered Posts: 2
    Thank you =)=)
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