Question

The annual inventory taking of Northam ltd did not take place on 30 September 2007 owing to staff illness.

The company books and records for the year ended 30 September 2007 reveal:

1.        Inventory at 1october 2006 at cost of $17800

2.      Purchases of $165000 and purchases return of $ 8500

3.      Sales of $ 182000

4.      Return inwards of $ 3600

5.      In July 2007, goods costing $ 10000 was stolen. As the company’s insurance did not fully cover the loss, the amount received from the insurance company in full settlement of the loss claim was only $4500.

6.      In August 2007 goods costing $3700, was found to be of no value and therefore destroyed.

7.      The company earns a gross profit of 35% on all goods.

8.      In September 2007, goods costing $ 6500 were sent on a sales return basis to Paulsin .

Required;

Calculate the company’s inventory at 30 September 2007.                            

Answer 1