Use the information below to answer questions 23 and 24.Beginning inventory............N? Purchases......................N? Ending inventory...............₦...

Use the information below to answer questions 23 and 24.Beginning inventory............N?

Purchases......................N?

Ending inventory...............₦4,800

Sales..........................₦12,800

Wages..........................₦1,040

Gross profit...................₦5,900The beginning inventory was estimated at 80% of sales.

Determine the amount for the beginning inventory?

Answer Details

To determine the amount of beginning inventory, we need to use the formula: Beginning inventory = Estimated beginning inventory ratio x Sales The question states that the beginning inventory was estimated at 80% of sales. Therefore, we can calculate the beginning inventory as follows: Beginning inventory = 0.8 x ₦12,800 Beginning inventory = ₦10,240 So, the amount for the beginning inventory is ₦10,240. Explanation: The beginning inventory is the value of the inventory at the start of an accounting period. In this question, the beginning inventory is estimated at 80% of sales. This means that 80% of the goods available for sale at the beginning of the period were still unsold. Therefore, we can use the estimated beginning inventory ratio of 80% and the sales of ₦12,800 to calculate the beginning inventory. The calculated beginning inventory is ₦10,240.