ACCA Applied Knowledge · Financial Accounting · Inventories
Dorian Ltd counted its inventory on 5 January, five days after its year end of 31 December. The count value was $92,000 at cost. Between 31 December and 5 January, goods costing $6,000 were sold for $9,000, and goods costing $4,000 were received from a supplier and included in the count (they were ordered and delivered after the year end). What is the inventory value at 31 December?
Inventory at 31 December is $94,000. Start with the $92,000 count, add back $6,000 at cost for goods sold after the year end, and deduct $4,000 for goods received after the year end but included in the count.
- A$94,000Correct
- B$90,000
- C$92,000
- D$98,000
Explanation
Start at the count of $92,000. Add back goods sold after the year end at cost: +$6,000 (they were held at 31 December), giving $98,000. Remove goods received after the year end: -$4,000, giving $94,000. Adding the $9,000 selling price in place of cost would be wrong.
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