Brad Shaw & Co. imports raw materials from China worth Rs.1 million. They paid Rs.80,000 as...

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Brad Shaw & Co. imports raw materials from China worth Rs.1 million. They paid Rs.80,000 as import duties and Rs.20,000 as import taxes (the import taxes were subsequently refunded by the local govermment). They paid Rs.50,000 for transportation of the materials from China and another Rs.10,000 as port handling charges for loading the materials at China. Marketing expenses were Rs.10,000 and the general administrative overheads amounted to Rs.5,000. What will be the value of inventories as per lAS 2? Question 4 AK Limited follows a perpetual inventory system. Following information is available from the accounting records for the month of January 2016: Quantity Amount (Rs.) Inventory as at 31 December 2015 3,500 35,000 Purchase on 7 January 2016 3,700 44,400 Purchase on 13 January 2016 4,200 58,800 Purchase on 31 January 2016 2,000 26,000 Sale on 12 January 2016 3,000 60,000 Sale on 25 January 2016 5,500 115,500 Additional information: (1) 100 units out of 4.200 units purchased on 13 January 2016 were found defective and returned to supplier on 28 January 2016. (i) Inventory count conducted on 31 January 2016 revealed that 4,820 units were physically available. Required: (a) Prepare inventory ledger cards for the month of January 2016 under the perpetual system showing quantity, unit cost and value under each of the following basis of inventory valuation: • FIFO • Weighted average (b) Under weighted average method, prepare journal entries to record the defective items returned to supplier and surplus/shortfall in the inventory due to physical count. Brad Shaw & Co. imports raw materials from China worth Rs.1 million. They paid Rs.80,000 as import duties and Rs.20,000 as import taxes (the import taxes were subsequently refunded by the local govermment). They paid Rs.50,000 for transportation of the materials from China and another Rs.10,000 as port handling charges for loading the materials at China. Marketing expenses were Rs.10,000 and the general administrative overheads amounted to Rs.5,000. What will be the value of inventories as per lAS 2? Question 4 AK Limited follows a perpetual inventory system. Following information is available from the accounting records for the month of January 2016: Quantity Amount (Rs.) Inventory as at 31 December 2015 3,500 35,000 Purchase on 7 January 2016 3,700 44,400 Purchase on 13 January 2016 4,200 58,800 Purchase on 31 January 2016 2,000 26,000 Sale on 12 January 2016 3,000 60,000 Sale on 25 January 2016 5,500 115,500 Additional information: (1) 100 units out of 4.200 units purchased on 13 January 2016 were found defective and returned to supplier on 28 January 2016. (i) Inventory count conducted on 31 January 2016 revealed that 4,820 units were physically available. Required: (a) Prepare inventory ledger cards for the month of January 2016 under the perpetual system showing quantity, unit cost and value under each of the following basis of inventory valuation: • FIFO • Weighted average (b) Under weighted average method, prepare journal entries to record the defective items returned to supplier and surplus/shortfall in the inventory due to physical count.

Answer rating: 100% (QA)

IAS2 provides that Inventory be valued at cost or net realizable value whichever is the least The co... View the full answer