INVENTORY VALUATION George Grande is the majority shareholder and CEO of Grande Ltd - NSC Accounting - Question 3 - 2019 - Paper 1

The % mark-up is calculated using the formula: ext{Mark-up ext (%) = } rac{ ext{Sales} - ext{Cost}}{ ext{Cost}} imes 100 Given that sales were $3,480,000 and cost$2,170,500, we find: ext{Mark-up ext (%) = } rac{3,480,000 - 2,170,500}{2,170,500} imes 100 ext{ = 60.3%}

1. Sales increased from $3,375,000 to$3,480,000, demonstrating a $105,000 increase, equating to an increase of 3.1%.
2. The number of customers grew from 26 to 37, a notable increase of 42%.

1. The gross profit decreased from $1,309,500 to$2,170,500; this is a reduction of $115,500 or 8.1% in profit margin.
2. The average selling price per customer dropped from 2.5 to 2.320, or a decline of 7.2%.

1. Restrict trade discounts to loyal customers only to enhance profit margins.
2. Increase marketing efforts, targeting areas beyond current market reach to boost sales.

The stockholding period is calculated as: ext{Stockholding Period = } rac{ ext{Average Stock}}{ ext{Cost of Sales}} imes 365 Given Average Stock of $59,625 and cost of sales of$930,375, we find: = rac{59,625}{930,375} imes 365 ext{ days} ext{ = 23.4 days}

The missing lamps can be calculated as: ext{Missing Lamps = Opening Stock + Purchases - Closing Stock - Sales Using $600 +$300 - $265 -$3,675, ext{ we find that there are } 460 ext{ missing lamps.} $$

1. Implement stricter controls and regular audits to manage stock.
2. Utilize CCTV for better inventory oversight.

For LYN TV sets, the valuation is: 7,800,000 - 2,580,000 = 5,220,000.
For KYA TV sets, the valuation is: 440,000 - 388,000 = 62,000.
The total value of closing stock on 30 September 2019 is $11,772,000.

1. The risk of overstocking could lead to increased holding costs.
2. Potential loss of revenue due to defective stock might impact customer satisfaction.
3. Difficulty in tracking sales leads to inaccuracies in financial reporting.