ACCA F3 Inventory

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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