The closing inventory of X amounted to $120,000 . including the following two inventory lines:
1. 400 items which had cost $40 each. All were sold after the reporting period for $32 each, with selling expenses of $500 for the batch.
2. 200 different items which had cost $70 each. these items were found to be defective at the end of the reporting period. Rectification work after the statement of financial position amounted to $704 , after which they were sold for $74 each, with selling expenses totalling $900.
What figure should appear in the statement of financial position of X for inventory?
Suggested solutions:
Item 1 | Cost | Items | Valuation |
Cost | 40 | 400 | 16,000 |
NRV | 32 | 400 | 12,800 |
Selling Expenses | 500 | ||
Net Realisable Value | 12,300 | ||
Item 2 | Cost | Items | Valuation |
Cost | 70 | 200 | 14,000 |
NRV | 74 | 200 | 14,800 |
Selling Expenses | 900 | ||
Rectification Expenses | 704 | ||
Net Realisable Value | 13,196 |
Closing Inventory | 120,000 |
Item 1 original valuation | (16,000) |
Item 1 new valuation | 12,300 |
Item 2 original valuation | (14,000) |
Item 2 new valuation | 13,196 |
Year End Inventory | 115,496 |
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2015 ACCA F3 INVENTORY