# SCM math series

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• emilychr
Participant

I have a quick question.  When you are ready to do your first profit/loss calculation the example does not include beginning order for inventory.  In the ledger there are actually 2 line items for inventory.  Shouldn’t both of those items be considered in the debit column and count against profit?

Sonya Shafer
Moderator

Let’s see if we can figure this out. At the end of the Start Up section, the Ledger entry should help the student calculate how much operating capital he has left after getting the store ready for business, which includes the beginning inventory. There is a Ledger Example to show how to make that entry, then there is a blank one at the bottom of the page for the student to use for his actual numbers.

When you calculate the first Profit and Loss at the end of January, that calculation should include only the amount spent on additional inventory ordered during January (to replace stock that was sold in orders that month).

Does that help clarify or just muddy the waters more?

emilychr
Participant

thank you Sonya.  It looked like the example in the teacher book did not include either start up inventory or new inventory order for January.  Thanks for clarifying this.  My daughter is absolutely loving this book.

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