• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Inventory

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Inventory

  • This topic has 5 replies, 3 voices, and was last updated 8 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • October 24, 2016 at 2:45 pm #345837
    firelion28
    Member
    • Topics: 159
    • Replies: 83
    • ☆☆☆

    The inventory counters of crocodile co infrom that there are 6000 products of A and 2000 products of B, these cost 10 and 5 each resp. They also tell
    A- 500 of these were found to be defective and would be sold at a cut price of 8
    B- 100 of these were to be sold for 4.50 and selling expesnes of 1.5 each

    what should be the value of inventory.

    the cost for A is 10 and nrv is 8, and cost for B is 4.5 and nrv is 3.5

    i am confused whether should i value only the 500 at 8 or the entire 6000 at 8
    similiary shoulld i value the entire 2000 at 3.5 or only the 100 and the rest at 5

    October 24, 2016 at 2:53 pm #345839
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Firstly, on the figures as you have typed them, the NRV of B is 4.5 – 1.5 = 3 (not 3.5).

    For A, there is no question. 500 of them are defective (and will be valued at $8), and therefore the other 5,500 are presumably OK and they will be valued at the cost of $10.

    For B, the question is not very good. The 100 will definitely be valued at the NRV of $3.
    The problem is as regards the remaining 1,900 because it depends whether they expect to sell them at the same low price or at a price higher than cost. It would be strange to have to sell 100 of them cheaply and the rest at a higher price (unless the 100 are defective as well in some way).

    I have asked you before – why are you attempting questions for which you do not have an answer? (If you do have an answer then you should be asking about what it is in the answer that you do not understand!)

    November 25, 2016 at 9:00 am #351366
    alescurti
    Member
    • Topics: 2
    • Replies: 6
    • ☆

    if a company is using fifo for valuation of inventory, supossing value 1/1/200x is 45000 $
    then during year they decide to move to AVC , we will have purchases during year and a closing inventory estimated based on AVC.
    in order to have the COGS shall we recalculate also the open inventory at AVC or there is no need?
    thanks

    November 25, 2016 at 2:23 pm #351419
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    There is no rule.

    But if they do change their accounting policy, then they do need a note explaining that they have changed, and why, and stating the effect on the profits of the change (i.e. the difference there would have been if they had not changed).

    November 25, 2016 at 3:21 pm #351460
    alescurti
    Member
    • Topics: 2
    • Replies: 6
    • ☆

    Thanks a lot!
    this was my point apart of disclosure there is no rule forcing company to recalcuate also the O.I. , i was jus scared to compare apples with pears.

    thanks again

    November 26, 2016 at 10:19 am #351574
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • julio99 on Impairments – Impairment (CGU) – ACCA Financial Reporting (FR)
  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1
  • darshan.69 on Chapter 9 Pension Schemes TX-UK FA2023

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in