ACCA F3 Inventory

The closing inventory of X amounted to $80,000 . excluding the following two inventory lines:

1. 400 items which had cost $72 each. All were sold after the reporting period for $58 each, with selling expenses of $900 for the batch.

2. 200 different items which had cost $40 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 $42 each, with selling expenses totalling $1,200.

What figure should appear in the statement of financial position of X for inventory?

Suggested solutions:

Item 1	Cost	Items	Valuation
Cost	72	400	28,800
NRV	58	400	23,200
Selling Expenses			900
Net Realisable Value			22,300
Item 2	Cost	Items	Valuation
Cost	40	200	8,000
NRV	42	200	8,400
Selling Expenses			1,200
Rectification Expenses			616
Net Realisable Value			6,584

Closing Inventory	80,000
Item 1 valuation	22,300
Item 2 valuation	6,584
Year End Inventory	108,884

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