2. Which of the following statements about inventory valuation are correct?

2. Which of the following statements about inventory valuation are correct?
1) Average cost and first in first out are both acceptable methods of arriving at the cost of
inventories
2) Inventories of finished goods may be valued at labour and materials costs only, without including overheads
3) Inventories should be valued at the lowest of cost, net realisable value and replacement
cost
4 ) It may be acceptable for inventories to be valued at selling price less estimated profit
margin
A) 1 and 3, B) 2 and 3, C) 1 and 4 , D) 2 and 4

3.The following figures are extracted from the financial statements of Giggs:

Answer: = 1.25
As a consequence, there is 25% mark-up on cost.

4. Arthur had net assets of $19,000 at 30 April 20X7. During the year to 30 April 20X7, he introduced $9,800 additional capital into the business and his profit for the year was $8,000.

During the year ended 30 April 20X7 he withdrew $4,200.
What was the balance on Arthur’s capital account at 1 May 20X6?
ANSWER:
19000-9800-8000+4200=5400
The capital account at 1 may 20X6 is $5400