Use the information below to answer the following questions:
At 1 July 2011, Epsilon Pty Ltd had 100 items of inventory which had cost $50 each. During the year ended 30 June 2012, it purchased 1500 items at a cost of $50 each. Of these, 200 were returned to the supplier as they were damaged. During the year, 1200 items were sold for $80 each, but 50 were returned by customers. Overhead expenses during the year amounted to $15,000.
-What was the value of inventory in the balance sheet at 30 June 2012?

Question

Quizplus · Accepted Answer

To calculate the value of inventory at 30 June 2012, we need to subtract the items sold and damaged from the total purchased and calculate the cost of remaining items.

Total items at 30 June 2012 = 100 (initial inventory) + 1500 (purchased) - 200 (returned to supplier) - 1150 (sold, i.e. 1200 - 50 returned by customers) = 250

Value of inventory at 30 June 2012 = 250 x $50 = $12,500

Therefore, the answer is D.

Use the Information Below to Answer the Following Questions