Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An optician's shop had an inventory of 3 5 0 , 0 0 0 at the turn of the year. The company purchased goods twice

An optician\'s shop had an inventory of 350,000 at the turn of the year. The company purchased goods twice in January: on 7 January for 430,000 and on 23 January for 190,000, both amounts including 25% VAT. When counting the inventory on 31 January, it turns out that the company had 475,000 worth of goods in stock. Ordinary profit before tax cost in January was 20,000.
What would the pre-tax profit have been if the inventory at 31 January had been 225,000 given that the rest of the costs and income had been unchanged.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Lets break down the information provided and calculate the pretax profit under the given scenario 1 ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: kieso, weygandt and warfield.

14th Edition

9780470587232, 470587288, 470587237, 978-0470587287

More Books

Students also viewed these Accounting questions