Question

You are evaluating your current portfolio of investments to determine those that are not performing to your expectations. You have all of the companies' most recent annual reports.
Required:
For the following, indicate where you would locate the information in an annual report. (Hint: The information may be in more than one location.)
(f) The inventory sold during the year.

Answer 1

The inventory sold during the year is located as the current asset in the balance sheet.

The closing balance of inventory  will be recorded in the balance sheet.

Inventory refers to the goods which is stored for the resale purpose.

Inventory is not recorded in the income statement but change in inventory is recorded in the income statement.

Increase in inventory will be deducted from the company's purchase of goods to calculate the cost of goods sold.

Decrease in the inventory is added in the purchases of goods.

Inventory plays a major role in determining the gross profit of the company.

Inventory balance can be calculated by different methods such as first in first out (FIFO), last in first out (LIFO), weighted average method.

To know more about cost of goods sold:

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