The selling price of inventory of Company M at 28 February i

The selling price of inventory of Company M at 28 February is $72,000. The company marks
up its goods by 44%. One quarter of the inventory has been damaged in a fire and will be
sold for $9,800. Which of the following will be the correct value for closing inventory at 28
February in the statement of financial position?

Solution

Cost of goods available =72000/144*100= 50000 Correct value for closing inventory = 9800+(50000/4*3)= 47300