Question

The books of accounts of Zebra Ltd. showed:

• Change in inventories of raw materials (₹ 70,000).
• Opening inventory of ₹ 2,40,000.

You are required to give the formula used by the company to calculate the change in inventories.

Answer 1

Change in Inventory = Opening Inventory − Closing Inventory

Change in Inventory of minus 70,000 means closing inventory is in excess by ₹ 70,000.

Closing Inventory 

= ₹ 2,40,000 + ₹ 70,000

= ₹ 3,10,000