Illustration 2 ABC Ltd. buys goods from an overseas supplier. It has recently taken delivery of 1,000 units of component X. The quoted price of component X was 1,200 per unit but ABC Ltd. has negotiated a trade discount of 5% due to the size of the order. The supplier offers an early settlement discount of 2% for payment within 30 days and ABC Ltd. intends to achieve this. Import duties (basic custom duties) of 60 per unit must be paid before the goods are released through custom. Once the goods are released through customs, ABC Ltd. must pay a delivery cost of 5,000 to have the components taken to its warehouse. Calculate the cost of inventory.

Illustration 2 ABC Ltd. buys goods from an overseas supplier. It has recently taken delivery of 1,000 units of component X. The quoted price of component X was 1,200 per unit but ABC Ltd. has negotiated a trade discount of 5% due to the size of the order. The supplier offers an early settlement discount of 2% for payment within 30 days and ABC Ltd. intends to achieve this. Import duties (basic custom duties) of 60 per unit must be paid before the goods are released through custom. Once the goods are released through customs, ABC Ltd. must pay a delivery cost of 5,000 to have the components taken to its warehouse. Calculate the cost of inventory.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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