The inventory of Gordon Ltd contains the following items at 30 June 2015 Unit price Item type Quantity Cost Net realisable value 3011 2507 601 4500 2825 75 30 20 50 40 $ 3 00 7 00 30 00 3 50 6 00 $ 2 60 8 50 27 00 2 50 7 00 Required A Determine the ending inventory value at 30 June 2015, applying t...

A Inventory Item Units on Hand Cost per Unit Total Cost Net Realisable Value per Uni ...

The inventory of Gordon Ltd contains the following items at 30 June 2015. Unit price Item type

Question:

The inventory of Gordon Ltd contains the following items at 30 June 2015.

		Unit price
Item type	Quantity	Cost		Net realisable value
3011 2507 601 4500 2825	75 30 20 50 40		$ 3.00 7.00 30.00 3.50 6.00		$ 2.60 8.50 27.00 2.50 7.00

Required

A. Determine the ending inventory value at 30 June 2015, applying the lower of cost and net realisable value rule to the individual items.

B. What effect did application of the rule rather than cost have on the financial statements of the company?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...

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