The closing inventory of X amounted to $70,000 . excluding 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 $800 for the batch.
2. 200 different items which had cost $50 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 $616 , after which they were sold for $53 each, with selling expenses totalling $1,050.
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 | 800 | ||
Net Realisable Value | 12,000 | ||
Item 2 | Cost | Items | Valuation |
Cost | 50 | 200 | 10,000 |
NRV | 53 | 200 | 10,600 |
Selling Expenses | 1,050 | ||
Rectification Expenses | 616 | ||
Net Realisable Value | 8,934 |
Closing Inventory | 70,000 |
Item 1 valuation | 12,000 |
Item 2 valuation | 8,934 |
Year End Inventory | 90,934 |
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2015 ACCA F3 INVENTORY