Question

On April 15 of the current year, a fire destroyed half of the uninsured ending inventory of a retail store. The following data are available: Sales, January 1 through April 15 $480,000 Inventory, January 1 80,000 Purchases, January 1 through April 15 400,000 Markup on cost 25% The amount of the ending inventory before the fire is

Answer 1

$96,000

Step-by-step explanation:

Particulars Amount

Opening inventory on 1st Jan $80,000

ADD: Purchases made $400,000

LESS: Cost of good sold $384,000

Closing inventory $96,000

Workings

Sales 480,000

Less: Mark up 480000*25/125 96,000

Cost of goods sold $384,000