Question:

What is the closing inventory value for the year 2020, show all calculations.

Voest Itd is a manufacturer and distributer of mine drilling equipment. All of its customers are in the extraction industry. The technology in the extraction industries has been changing rapidly in recent years. As a result of this rapid change, Voest itd has been investing significantly in research and development in order to keep pace with the changes in the industry. The company is focused on becoming the market leader in the existing product offering. The company has patented many of its existing products. This was obviously done to protect the company's intellectual property. Voest Itd has a wide range of products that it manufactures. It manufactures products developed in house and it also manufactures products that have been designed by market leaders. In 2016 Voest entered into an agreement with Steglich Itd. Steglich Itd is based in Munich Germany and it is a global leader in the manufacturing of specialized high carbon content mine drills. Voest ltd obtained the right to manufacture and sell the high carbon content mine drills. The specialized high carbon content mine drills will be distributed in Southern Africa. Voest Itd pays a fixed royalty in Euros for each unit of specialized high carbon content mine drills manufactured and sold. The royalties are paid quarterly in arrears. The specialized high carbon content mine drills have proved to be very successful in South Africa because of the relatively complex geological structure of the Southern African region. The total revenue from the high carbon content specialized drills represents 30% of the total annual revenue of Voest Itd. Voest Itd's focus has been primarily on South African customers. However, Voest Itd has also supported the subsidiaries of South African customers that are located in the rest of Africa and the Middle East. The revenues from these foreign subsidiaries constitute about 10% of the total annual revenue. These subsidiaries are also invoiced in Euros. The mining industry in South Africa has been under a lot of pressure during the past few years. This was caused by the Covid 19 pandemic which caused a muted global economic growth. Consequently, Voest has struggled to grow its revenue over the past three years. A special type of steel is used in the manufacture of specialized high carbon mine drilling equipment. The steel prices have also been very volatile over the past few years, due to the Covid 19 pandemic. Thus, this has also added to the pressure on the company's profit margins. For Voest working capital management has become very crucial in order to stay afloat. This was as caused by a number of factors. Initially, a significant number of customers have been placing orders at the last moment. This caused Voest to hold larger volumes of inventory in order to meet the unexpected demand from these customers. It is important to note that all Voest Itd's sales are on credit. Voest Itd allows its customers 60 days to pay from the invoicing date. A lot of customers have been delaying payments due to cash flow problems. As a result of this Voest Itd's bank overdraft has been increasing over the years, such that it has become a permanent source of finance. The interest on overdraft is 10% per annum, compounded monthly. Voest Itd has had no other debt since 2019. Bankers are currently not very willing to grant Voest Itd long term finance. This is due to concerns about the company's cash flow generation ability and the negative outlook in the mining industry in general. Extracts from the income statement for the year ended 31 December 2021 Extracts from the Balance Sheet as at 31 December 2021 The inventory balance as at 31 December 2021 is R28 060000 Voest Itd is a manufacturer and distributer of mine drilling equipment. All of its customers are in the extraction industry. The technology in the extraction industries has been changing rapidly in recent years. As a result of this rapid change, Voest itd has been investing significantly in research and development in order to keep pace with the changes in the industry. The company is focused on becoming the market leader in the existing product offering. The company has patented many of its existing products. This was obviously done to protect the company's intellectual property. Voest Itd has a wide range of products that it manufactures. It manufactures products developed in house and it also manufactures products that have been designed by market leaders. In 2016 Voest entered into an agreement with Steglich Itd. Steglich Itd is based in Munich Germany and it is a global leader in the manufacturing of specialized high carbon content mine drills. Voest ltd obtained the right to manufacture and sell the high carbon content mine drills. The specialized high carbon content mine drills will be distributed in Southern Africa. Voest Itd pays a fixed royalty in Euros for each unit of specialized high carbon content mine drills manufactured and sold. The royalties are paid quarterly in arrears. The specialized high carbon content mine drills have proved to be very successful in South Africa because of the relatively complex geological structure of the Southern African region. The total revenue from the high carbon content specialized drills represents 30% of the total annual revenue of Voest Itd. Voest Itd's focus has been primarily on South African customers. However, Voest Itd has also supported the subsidiaries of South African customers that are located in the rest of Africa and the Middle East. The revenues from these foreign subsidiaries constitute about 10% of the total annual revenue. These subsidiaries are also invoiced in Euros. The mining industry in South Africa has been under a lot of pressure during the past few years. This was caused by the Covid 19 pandemic which caused a muted global economic growth. Consequently, Voest has struggled to grow its revenue over the past three years. A special type of steel is used in the manufacture of specialized high carbon mine drilling equipment. The steel prices have also been very volatile over the past few years, due to the Covid 19 pandemic. Thus, this has also added to the pressure on the company's profit margins. For Voest working capital management has become very crucial in order to stay afloat. This was as caused by a number of factors. Initially, a significant number of customers have been placing orders at the last moment. This caused Voest to hold larger volumes of inventory in order to meet the unexpected demand from these customers. It is important to note that all Voest Itd's sales are on credit. Voest Itd allows its customers 60 days to pay from the invoicing date. A lot of customers have been delaying payments due to cash flow problems. As a result of this Voest Itd's bank overdraft has been increasing over the years, such that it has become a permanent source of finance. The interest on overdraft is 10% per annum, compounded monthly. Voest Itd has had no other debt since 2019. Bankers are currently not very willing to grant Voest Itd long term finance. This is due to concerns about the company's cash flow generation ability and the negative outlook in the mining industry in general. Extracts from the income statement for the year ended 31 December 2021 Extracts from the Balance Sheet as at 31 December 2021 The inventory balance as at 31 December 2021 is R28 060000