Draft financial statements show revenue of $106 000 and closing inventory of $2100. There were 100 items which had cost $10 an item but which were for sale at $6 an item. At the year end these were with a customer on a sale or return basis. These items were treated as having been sold although no sale had been agreed. What are the values of revenue and inventory when the principle of prudence is applied?

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Paul has a year end of 31 December. On 1 January 2020, he bought a non-current asset for $10000. He sold it on 1 Janu…

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