QUESTION
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2017
N$
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100 CDs at $3.30 each (including 10 % VAT)
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20 Tuition computer programs at cost price of $180 each
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10 central processing units of which only takes one CD at a cost of $ 1700 each
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30 central processing units of which the memories were increased
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Original cost price
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1 900
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Cost of increasing money
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300
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Total cost per unit
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2 200
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The following information was also obtained on 26 April
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Sales value of CDs: $3.50 each (including 10% VAT)
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Net realisable values:
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Tuition programs
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150
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One-"CD"-central processing unit
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1 500
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Increased memory-central processing units
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|
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3 000
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2 000
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It is considered undesirable to remove the already installed increased
memory device
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a) Determine at what unit price each type of inventory item shall be measured at on 31 March 2017
b) Prepared the journal entries on 31 march 2017 to reflect the changes needed in terms of reflecting the correct measurements in a) above. Journal narrations are not required.
c) Mention the three ways in which net realisable value is determined in general.
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1
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Inventory on hand: 20 units -14@ $1.80 each
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- 6 @ $2.00 each
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5
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Purchased 60 units @ $3.00 each
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10
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Purchased 35 units @ $4.00 each
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11
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Sold 30 units
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15
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Purchased 40 units @$5.00 each
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19
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Sold 50 units
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22
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Purchased 100 units @ $4.00 each
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30
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Sold 60 units
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The selling price during April amounted to $6.00 per unit.
A perpetual inventory system is being used and on 30 April 2017 it was determined that the normal selling price of the units had dropped to $5.00 per unit because a competitor had entered the market. Normal selling expenses amount to $1.00 per unit.
Required:
a) Calculate the cost of sales in the statement of profit of loss and other comprehensive income for April and the value of inventory on hand at 30 April 2017.
b) Disclose the above information in the statement of profit or loss and other comprehensive income for April 2017 in compliance with the requirements of IFRS.