Paper Sweets Supplies Limited is located in Kingston. On the last balance sheet date, inventory amounted to $ The entity conducted a stock count with the aim of valuing inventory for financial statements purposes. The count along with the relevant invoices indicated that there were dairynut chocolate bars as at December the last balance sheet date. Further investigations revealed that, this amount resulted from two different invoices. The following information relates to the chocolate bars:

Invoice Date

Invoice Number

Quantity

Total cost

March

XY

$

July

XY

$

The inventory controller states that of the inventory as at December relates to March invoice, while, the remainder can be attributed to July However, the financial controller wants to ascertain the inventory balance as at December for financial reporting purposes. The controller also understands that although the lastinfirst out LIFO method is not allowed by the international financial reporting standards IFRSs it is acceptable by the US GAAP. Hence, although the companys policy is the average cost method, management wants to know the impact it has when used.

Below are data relating to the receipt and issue of dairynutchocolate bars during the period ended December :

Required:

a

Calculate the inventory value and profit for the period ended December using the companys current inventory valuation policy. marks

b

Calculate the inventory balance and profit for the period ended December using the method acceptable by IFRS. marks

c

Calculate the inventory value and profit for the period ended December using the method acceptable by the US GAAP. marks

 

Answer rating: 100% (QA)

To calculate the inventory value and profit for the period ended December 31 2023 using different inventory valuation methods well need to consider th... View the full answer