Max Sport Ltd is a retailer of sporting equipment. The following table is relatedto the values of
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Question:
Description A B C D E
Cost 60,000 40,000 30,000 50,000 20,000
Market selling value 100,000 30,000 40,000 70,000 25,000
Replacement price 80,000 25,000 35,000 40,000 22,000
Required:
(a) Calculate the value of closing inventory to be used in order to minimisethe taxable income of Max Sport Ltd for the current tax year.(3 marks)
(b) If Max Sport Ltd had accumulated losses of $200,000, how should theclosing inventory be valued? Recalculate the value of closing inventory.(3 marks)
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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