At 31 March Tenta had 12,000 units of product W32 in inventory, included at cost of GHS6 per unit. During April and May 2017 units of W32 were being sold at a price of GHS5.40 each, with sales staff receiving a 15% commission on the sales price of the product. At what amount should inventory of product W32 be recognised in the financial statements of Tenta as at 31 March 2017?

At 31 March Tenta had 12,000 units of product W32 in inventory, included at cost of GHS6 per unit. During April and May 2017 units of W32 were being sold at a price of GHS5.40 each, with sales staff receiving a 15% commission on the sales price of the product. At what amount should inventory of product W32 be recognised in the financial statements of Tenta as at 31 March 2017?

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Description: At 31 March Tenta had 12,000 units of product W32 in inventory, included atcost of GHS6 per unit. During April and May 2017 units of W32 were being soldat a price of GHS5.40 each, with sales staff receiving a 15% commission on thesales price of the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

At 31 March Tenta had 12,000 units of product W32 in inventory, included at
cost of GHS6 per unit. During April and May 2017 units of W32 were being sold
at a price of GHS5.40 each, with sales staff receiving a 15% commission on the
sales price of the product. At what amount should inventory of product W32
be recognised in the financial statements of Tenta as at 31 March 2017?

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