Question

The amount of inventory on hand at the end of each year is counted so that Scott can get a clear idea of what he has on hand. Scott determined the value of the inventory on December 31, 20X7 and 20X6, by using the list of what was in the stock room on these dates and applying prices from the most recent supplier price lists. On December 31, 20X6, GPP had inventory of $8,200, and on December 31, 20X7, the inventory balance was $12,222. This has not been recorded in the financial statements but Scott likes to know for himself.

Answer 1

The question pertains to the calculation of inventory value at year-end for a business, which is crucial for financial assessment and reporting. Scott uses recent supplier prices to determine the inventory value, which shows an increase from $8,200 in 20X6 to $12,222 in 20X7.

Step-by-step explanation:

The question asks about the value of inventory counted at the end of the year, which is essential for understanding a business's current assets and determining its financial health.

To calculate the value of inventory, Scott uses the most recent supplier price lists applied to the items in stock as of the specific dates.

On December 31, 20X6, the inventory was valued at $8,200, while on December 31, 20X7, it increased to $12,222.

These figures are crucial for financial reporting and are used to assess any changes in the quantity of goods held or shifts in their cost values, impacting the company's financial statements.