B.Storm Inc. had 500 units of Product X at 30 June 2020 in inventory. The product had beenpurchased at list price of $18 per unit and normally sells for $24 per unit.Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit.Recently , Product X started to deteriorate but can still be sold for $24 per unit, provided thatsome rectification/re-packaging work is undertaken at a cost of $3 per unit.Required:At what amount would Product X be required to be stated on 30 June 2020? Provide detailedanalysis to support your answer.
B.Storm Inc. had 500 units of Product X at 30 June 2020 in inventory. The product had beenpurchased at list price of $18 per unit and normally sells for $24 per unit.Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit.Recently , Product X started to deteriorate but can still be sold for $24 per unit, provided thatsome rectification/re-packaging work is undertaken at a cost of $3 per unit.Required:At what amount would Product X be required to be stated on 30 June 2020? Provide detailedanalysis to support your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
B.
Storm Inc. had 500 units of Product X at 30 June 2020 in inventory. The product had been
purchased at list price of $18 per unit and normally sells for $24 per unit.
Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55
per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit.
Recently , Product X started to deteriorate but can still be sold for $24 per unit, provided that
some rectification/re-packaging work is undertaken at a cost of $3 per unit.
Required:
At what amount would Product X be required to be stated on 30 June 2020? Provide detailed
analysis to support your answer.
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