▁ ▁- ▁Cl osing ▁invent ories ▁( In ventory ▁on ▁hand ▁at ▁the ▁end ▁of ▁the ▁year ) ▁ ▁Example ▁Question : ▁A ▁business ▁entity ▁purch ases ▁£ 1 0 4 0 0 ▁worth ▁of ▁equipment ▁in ▁order ▁to ▁construct ▁computers . ▁During ▁the ▁financial ▁year , ▁£ 1 4 0 0 ▁worth ▁of ▁equipment ▁is ▁returned ▁to ▁the ▁entity ▁by ▁its ▁customers ▁as ▁the ▁equipment ▁was ▁determined ▁to ▁be ▁fault y . ▁The ▁previous ▁financial ▁year , ▁the ▁entity ▁had ▁£ 3 0 0 0 ▁worth ▁of ▁equipment ▁left ▁over . ▁The ▁entity ▁makes ▁use ▁of ▁a ▁tr uck ing ▁company ▁to ▁deliver ▁all ▁of ▁its ▁goods . ▁The ▁tr uck ing ▁company ▁charges ▁the ▁entity ▁£ 1 2 0 ▁for ▁the ▁year ▁to ▁deliver ▁the ▁equipment . ▁The ▁entity ▁sold ▁£ 1 4 5 0 0 ▁worth ▁of ▁items ▁during ▁the ▁year ▁to ▁various ▁customers . ▁The ▁entity ▁checked ▁its ▁invent ory ▁stock ▁levels ▁at ▁the ▁end ▁of ▁the ▁year ▁and ▁determined ▁that ▁there ▁was ▁£ 2 0 0 0 ▁worth ▁of ▁invent ories ▁left ▁over . ▁ ▁Solution : ▁ ▁Sales ▁calculation : ▁ ▁Sales ▁= ▁Sales ▁for ▁the ▁year ▁- ▁Returns ▁in ▁( Good s ▁that ▁were ▁returned ▁to ▁the ▁entity ▁during ▁the ▁course ▁of ▁the ▁year ) ▁Sales ▁= ▁£ 1 4 5 0 0 ▁- ▁£ 1 4 0 0 ▁Sales ▁= ▁£ 1 3 1 0 0 ▁ ▁Cost ▁of ▁sales ▁calculation : ▁ ▁Therefore , ▁Cost ▁of ▁sales ▁= ▁Good s ▁available ▁for ▁sale ▁-