The closing inventory of AB Ltd amounted to R116,400 excluding the following two inventory lines:
(a) 400 items which had cost R4 each. All were sold after the statement of financial position date for R3 each, with selling expenses of R200 for the batch.
(b) 200 different items which had cost R30 each. These items were found to be defective at the statement of financial position date.
Rectification work after the statement of financial position amounted to R1,200, after which they were sold for R35 each, with selling expenses totaling R300.
Which of the following total figures should appear in the statement of financial position of AB Ltd for inventory?
The total figures for inventory that should appear in the statement of financial position of AB Ltd are as follows:
1. Closing inventory excluding the two items: R116,400
2. Cost of the defective items (200 items at R30 each): R6,000
3. Cost of rectification work for defective items: R1,200
Therefore, the total inventory figure that should appear in the statement of financial position of AB Ltd is:
R116,400 + R6,000 - R1,200 = R121,200