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Jason owns a supermarket. He has bought a batch of dried fruits that he intends to sell at a very low price in order to attract customers into his shop.
He has purchased 1,000 tins at a cost of 30c and 500 tins at a cost of 33c. He plans to sell the soup at 5c per tin.
At what total value should the tins be included in Jason’s financial statements?
Sir , I try to solve this question
Like this.
1000 x 0.25. 250
500 x 0.33 165
Total. 250 +165. 415
Is it correct or wrong
Can you please help me with this question ??Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – it has answers and explanations!!
If you watch my free lectures you will see that according to IAS 2 the inventory should be valued at the lower of cost and net realisable value. They intend to see the tins at 5c, which is lower than the cost, and so all the tins remaining in inventory should be valued at 5c.
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