Question
Question 1
SITHOLE RETAILERS
Calculation of closing inventory
Opening inventory
Purchases:
Credit purchases
Cash purchases
Purchases returns
Purchases not received at 31 March 20.1
Goods available for sale
Less: Closing inventory
Cost of sales:
Cost of Credit sales (after deducting sales not delivered)
Cost of Cash sales
SITHOLE RETAILERS
Calculation of closing inventory
Opening inventory
Purchases:
Credit purchases
Cash purchases
Purchases returns
Purchases not received at 31 March 20.1
Goods available for sale
Less: Closing inventory
Cost of sales:
Cost of Credit sales (after deducting sales not delivered)
Cost of Cash sales
Answers
GPT-4o mini
To assist you with the calculation of the closing inventory for Sithole Retailers, let's start by outlining the steps and components involved. Below is a general framework you can follow, along with explanations of each component you would typically adjust for.
### Calculation of Closing Inventory
1. **Opening Inventory**: This is the value of inventory that was in stock at the beginning of the period. Let's denote this amount as **Opening Inventory**.
2. **Purchases**: This includes both credit and cash purchases, adjusted for returns and goods not yet received.
- **Credit Purchases**: The total amount of inventory purchased on credit.
- **Cash Purchases**: The total amount of inventory purchased with cash.
- **Purchases Returns**: Inventory that has been returned and should be subtracted from the total purchases.
- **Purchases Not Received at 31 March 20.1**: This includes purchases that were made but not yet received by the end of the accounting period. This amount should also be subtracted from the total purchases.
So, your total purchases can be calculated as follows:
\[
\text{Total Purchases} = (\text{Credit Purchases} + \text{Cash Purchases}) - \text{Purchases Returns} - \text{Purchases Not Received}
\]
3. **Goods Available for Sale**: This is the sum of the opening inventory and total purchases.
\[
\text{Goods Available for Sale} = \text{Opening Inventory} + \text{Total Purchases}
\]
4. **Closing Inventory**: At this point, you will need to determine the value of the closing inventory at the end of the accounting period. This would involve a physical count of inventory or use of inventory valuation methods (FIFO, LIFO, Weighted Average, etc.).
5. **Cost of Sales**: This is calculated by subtracting the closing inventory from the goods available for sale.
\[
\text{Cost of Sales} = \text{Goods Available for Sale} - \text{Closing Inventory}
\]
6. **Cost of Credit Sales**: This relates to the total cost of credit sales, adjusted for any sales not yet delivered or returns.
7. **Cost of Cash Sales**: Similar to credit sales, but for cash transactions.
### Summary Table (Example Structure)
| **Item** | **Amount** |
|----------|------------|
| Opening Inventory | xx |
| Credit Purchases | xx |
| Cash Purchases | xx |
| Purchases Returns | (xx) |
| Purchases Not Received | (xx) |
| **Total Purchases** | = (Credit Purchases + Cash Purchases - Purchases Returns - Purchases Not Received) |
| **Goods Available for Sale** | = (Opening Inventory + Total Purchases) |
| Closing Inventory | (xx) |
| **Cost of Sales** | = (Goods Available for Sale - Closing Inventory) |
| Cost of Credit Sales | xx |
| Cost of Cash Sales | xx |
### Notes
- Be sure to fill in the relevant amounts where "xx" is indicated based on your provided data or calculations.
- If you need specific numerical examples or calculations or if you have specific values for each component, please provide them, and I can assist you further!
### Calculation of Closing Inventory
1. **Opening Inventory**: This is the value of inventory that was in stock at the beginning of the period. Let's denote this amount as **Opening Inventory**.
2. **Purchases**: This includes both credit and cash purchases, adjusted for returns and goods not yet received.
- **Credit Purchases**: The total amount of inventory purchased on credit.
- **Cash Purchases**: The total amount of inventory purchased with cash.
- **Purchases Returns**: Inventory that has been returned and should be subtracted from the total purchases.
- **Purchases Not Received at 31 March 20.1**: This includes purchases that were made but not yet received by the end of the accounting period. This amount should also be subtracted from the total purchases.
So, your total purchases can be calculated as follows:
\[
\text{Total Purchases} = (\text{Credit Purchases} + \text{Cash Purchases}) - \text{Purchases Returns} - \text{Purchases Not Received}
\]
3. **Goods Available for Sale**: This is the sum of the opening inventory and total purchases.
\[
\text{Goods Available for Sale} = \text{Opening Inventory} + \text{Total Purchases}
\]
4. **Closing Inventory**: At this point, you will need to determine the value of the closing inventory at the end of the accounting period. This would involve a physical count of inventory or use of inventory valuation methods (FIFO, LIFO, Weighted Average, etc.).
5. **Cost of Sales**: This is calculated by subtracting the closing inventory from the goods available for sale.
\[
\text{Cost of Sales} = \text{Goods Available for Sale} - \text{Closing Inventory}
\]
6. **Cost of Credit Sales**: This relates to the total cost of credit sales, adjusted for any sales not yet delivered or returns.
7. **Cost of Cash Sales**: Similar to credit sales, but for cash transactions.
### Summary Table (Example Structure)
| **Item** | **Amount** |
|----------|------------|
| Opening Inventory | xx |
| Credit Purchases | xx |
| Cash Purchases | xx |
| Purchases Returns | (xx) |
| Purchases Not Received | (xx) |
| **Total Purchases** | = (Credit Purchases + Cash Purchases - Purchases Returns - Purchases Not Received) |
| **Goods Available for Sale** | = (Opening Inventory + Total Purchases) |
| Closing Inventory | (xx) |
| **Cost of Sales** | = (Goods Available for Sale - Closing Inventory) |
| Cost of Credit Sales | xx |
| Cost of Cash Sales | xx |
### Notes
- Be sure to fill in the relevant amounts where "xx" is indicated based on your provided data or calculations.
- If you need specific numerical examples or calculations or if you have specific values for each component, please provide them, and I can assist you further!