CID Retail has the following purchases and sales of a particular product line. Purchased price per...
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CID Retail has the following purchases and sales of a particular product line. Purchased price per unit Rs.000 Particulars 02 December 16 December 30 December 14 January 28 January 11 February Units Purchased 100 60 70 50 80 40 500 503 506 509 512 515 Units sold 60 80 50 70 50 40 Selling price per unit Rs.000 530 528 526 524 522 520 At 31 December the physical inventory was 150 units. The cost of inventories is determined on a FIFO basis. Selling and distribution costs amount to 5% of selling price and general administration expenses amount to 7% of selling price. Required: (a) State any three reasons why the net realizable value of inventory may be less than cost. (b) Calculate to the nearest Rs. '000 the value of inventory at 31 December (i) at cost (ii) at net realizable value (iii) at the amount to be included in the financial statements in accordance with IAS 2. CID Retail has the following purchases and sales of a particular product line. Purchased price per unit Rs.000 Particulars 02 December 16 December 30 December 14 January 28 January 11 February Units Purchased 100 60 70 50 80 40 500 503 506 509 512 515 Units sold 60 80 50 70 50 40 Selling price per unit Rs.000 530 528 526 524 522 520 At 31 December the physical inventory was 150 units. The cost of inventories is determined on a FIFO basis. Selling and distribution costs amount to 5% of selling price and general administration expenses amount to 7% of selling price. Required: (a) State any three reasons why the net realizable value of inventory may be less than cost. (b) Calculate to the nearest Rs. '000 the value of inventory at 31 December (i) at cost (ii) at net realizable value (iii) at the amount to be included in the financial statements in accordance with IAS 2.
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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