ACCA F3 Inventory

The closing inventory of X amounted to $160,000 . including the following two inventory lines:

1. 400 items which had cost $56 each. All were sold after the reporting period for $45 each, with selling expenses of $900 for the batch.

2. 200 different items which had cost $60 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 $63 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	56	400	22,400
NRV	45	400	18,000
Selling Expenses			900
Net Realisable Value			17,100
Item 2	Cost	Items	Valuation
Cost	60	200	12,000
NRV	63	200	12,600
Selling Expenses			1,050
Rectification Expenses			616
Net Realisable Value			10,934

Closing Inventory	160,000
Item 1 original valuation	(22,400)
Item 1 new valuation	17,100
Item 2 original valuation	(12,000)
Item 2 new valuation	10,934
Year End Inventory	153,634

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