At the End of the Year,NewBiscuit Company Has Inventory in Hand

question 7

Multiple Choice

At the end of the year,NewBiscuit company has inventory in hand at a selling price of £10,500.What was the cost of inventory assuming inventory is marked up at 50%?

• A) £5,250
• B) £8,000
• C) £3,000
• D) £7,000

---

Definitions:

Perpetual Inventory System

A system for managing inventory accounts that automatically updates the sale or purchase records using computerized point-of-sale technology and software for enterprise asset management.

Merchandise Inventory

The total value of a company’s goods that are available for sale to customers, comprising both raw materials and finished products.

Trade Discounts

Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.

List Prices

The pre-discount price at which goods and services are listed to be sold to customers.