Sticky Ltd manufacturers and sells adhesive warning signs for workplaces.
The stock of signs was included in the closing inventory as of 31 December 20.19 at a cost of R50 per pack.
During the final audit the auditors noted that the subsequent selling price for the inventory at 15th January 20.20 was R40 per pack.
Furthermore, inquiry reveals that during the physical stock take, a water leakage has damaged the signs and glue.
Accordingly in the following week, Sticky Ltd spent a total of R15 per pack for repairing and reapplying the glue to the signs.
The net realizable value and inventory write-down (loss) amount to…
a.
R40 and R10 respectively.
b.
R25 and R25 respectively.
c.
R35 and R25 respectively.
d.
R30 and R15 respectively