Problem
Kevin's business sells air-conditioning units. Included in closing inventory are 10 units which cost £150 each but have proved unpopular with customers so Kevin has decided to sell these off at £80 each in the next accounting period. Opening inventory was £30 000, revenue for the year was £165 000 and purchases were £110 000; some of the units were sourced from China and incurred import duties of £2 500. Closing inventory (including the unpopular units) at cost value is £27 000. Applying the appropriate rule for valuing inventory, what will be Kevin's gross profit for the year?