Zenith Trading Company purchases computer parts and accessories from several countries, assembles them into desktop computers...

Transcribed Image Text:

Zenith Trading Company purchases computer parts and accessories from several countries, assembles them into desktop computers and sells the completed units to other countries. During the year, January to December 2021, the company incurred the following expenses on its imports: $ 23,000+ 750,000 i. Handling costs relating to imports ii. Salaries of accounting department iii. After sales warranty costs iv. Import duties v. Invoiced costs of purchases from supplier vi. Freight expense vii. Insurance of purchases viii. Manufacturing overheads ix. Brokerage commission paid to indenting agents x. Trade discounts on purchases xi. Sales commission paid to sales agents B. 22,500 45,000 T You are required to: A. Advise Zenith on which costs are either allowed or not allowed by IAS 2 for inclusion in the purchase of parts and accessories. (11 marks) Calculate the cost of inventory of desktop computers based on IAS 2. (4 marks) Explain to Zenith how the figure for desktop computer inventory in the financial statements will be determined based on IAS 2. (5 marks) (Total 20 marks) C. 1,500,000 25,000+ 50,000+ 64,000 2.5% of purchases + 1% of purchases 10% of purchases Zenith Trading Company purchases computer parts and accessories from several countries, assembles them into desktop computers and sells the completed units to other countries. During the year, January to December 2021, the company incurred the following expenses on its imports: $ 23,000+ 750,000 i. Handling costs relating to imports ii. Salaries of accounting department iii. After sales warranty costs iv. Import duties v. Invoiced costs of purchases from supplier vi. Freight expense vii. Insurance of purchases viii. Manufacturing overheads ix. Brokerage commission paid to indenting agents x. Trade discounts on purchases xi. Sales commission paid to sales agents B. 22,500 45,000 T You are required to: A. Advise Zenith on which costs are either allowed or not allowed by IAS 2 for inclusion in the purchase of parts and accessories. (11 marks) Calculate the cost of inventory of desktop computers based on IAS 2. (4 marks) Explain to Zenith how the figure for desktop computer inventory in the financial statements will be determined based on IAS 2. (5 marks) (Total 20 marks) C. 1,500,000 25,000+ 50,000+ 64,000 2.5% of purchases + 1% of purchases 10% of purchases

Answer rating: 100% (QA)

A Advise Zenith on which costs are either allowed or not allowed by IAS 2 for inclusion in the purch... View the full answer