The closing inventory at cost of a company at December 31, 2019 amounted to P284,700. The following items were included at cost in the total: • 400 coats, which had cost P80 each and normally sold for P150 each. Owing to a defect in manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds. 800 skirts, which had cost P20 each. These too were found to be defective. Remedial work in February 2020 cost P5 per skirt, and selling expenses for the batch totalled P800. They were sold for P28 each. What should the inventory value be according to PAS 2 Inventories after considering the above items?
The closing inventory at cost of a company at December 31, 2019 amounted to P284,700. The following items were included at cost in the total: • 400 coats, which had cost P80 each and normally sold for P150 each. Owing to a defect in manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds. 800 skirts, which had cost P20 each. These too were found to be defective. Remedial work in February 2020 cost P5 per skirt, and selling expenses for the batch totalled P800. They were sold for P28 each. What should the inventory value be according to PAS 2 Inventories after considering the above items?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The correct answer given is ₱281,200. Could you please show the solution, explaining how we arrived at that amount? Thank you!
Transcribed Image Text:The closing inventory at cost of a company at
December 31, 2019 amounted to P284,700. The
following items were included at cost in the total:
• 400 coats, which had cost P80 each and normally
sold for P150 each. Owing to a defect in
manufacture, they were all sold after the reporting
date at 50% of their normal price. Selling expenses
amounted to 5% of the proceeds.
• 800 skirts, which had cost P20 each. These too
were found to be defective. Remedial work in
February 2020 cost P5 per skirt, and selling
expenses for the batch totalled P800. They were
sold for P28 each.
What should the inventory value be according to PAS 2
Inventories after considering the above items?
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