Tumit & Co. has been selling shoes for 10 years. During the year the demand for their
Question:
Tumit & Co. has been selling shoes for 10 years. During the year the demand for their shoes fluctuated depending on the fashion trends in the market. The following are their three products currently in the market at the end of the year.
Product | Kasut | Selipar | Sandal |
Carrying value | RM 20,000 | RM 18,000 | RM 17,000 |
Units | 700 | 1500 | 1000 |
Estimated selling price | RM 35 | RM 12 | RM 20 |
Units damaged | 50 | 200 | 170 |
Cost to repair | RM 7 | RM 2 | RM 4 |
Commission to Kaki& Co. | RM 2 | RM 1 | RM 1 |
Tumit had appointed Kaki Co. to sell their products with a certain commission rate. Prior to that, Tumit had ensure all damaged goods were repaired before sending to Kaki Co.
Required:
(a) Briefly explain how Tumit & Co. able to measure their inventories.
(b) Determine the net realisable value of Kasut, Selipar and Sandal.
(c) Determine the cost of inventory at the end of the financial year.
(d) Identify the relevant standard to the above scenario and justify your answer.
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina