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* Some inventory items included in the draft statement of financial position at cost $500,000 were sold after the reporting date for $400,000, with selling expenses of $40,000.
The inventory amount in the balance sheet is 3,000,000.
WE need the inventory amount, considering the adjustment above?Inventory should be valued at the lower of cost and net realisable value. Here the cost is 500,000 and the NRV is 360000. So they should be valued at 360000.
At the moment they have been included at cost in the 3,000,000 so the 3,000,000 needs reducing by the difference of 140,000.
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