Question 3 PART A The owner of Plants 'R' Us is preparing her accounts for the...

 

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Question 3 PART A The owner of Plants 'R' Us is preparing her accounts for the year ended 31 December 20X4. She has prepared a list of inventory in her shop on accounting year end date, but is unsure how to value the following items: Description Potted roses Plastic plant pots Bay trees Quantity 5 45 3 Purchase price per item £ 3.99 0.40 24.75 Expected sales price per item £ 2.99 0.50 28.75 Note 2 Notes: 1. The potted roses have been in the shop for some time and have already finished flowering. They can only be sold at a discounted price. 2. In order to sell the bay trees, the owner will need to repot them as they have outgrown the containers they are currently in and do not look very attractive. She estimates the new pots will cost a further £5 for each tree Required: What is the total accounting value of the inventory at the year ended 31 December 20X4? Justify your answer. (9 Marks) Question 3 PART A The owner of Plants 'R' Us is preparing her accounts for the year ended 31 December 20X4. She has prepared a list of inventory in her shop on accounting year end date, but is unsure how to value the following items: Description Potted roses Plastic plant pots Bay trees Quantity 5 45 3 Purchase price per item £ 3.99 0.40 24.75 Expected sales price per item £ 2.99 0.50 28.75 Note 2 Notes: 1. The potted roses have been in the shop for some time and have already finished flowering. They can only be sold at a discounted price. 2. In order to sell the bay trees, the owner will need to repot them as they have outgrown the containers they are currently in and do not look very attractive. She estimates the new pots will cost a further £5 for each tree Required: What is the total accounting value of the inventory at the year ended 31 December 20X4? Justify your answer. (9 Marks)

Answer rating: 100% (QA)

Inventory shall be valued at cost or NRV whichever is lower L 1 2 ... View the full answer