The following data are available for Vortex Manufacturing Pty Ltd at 30 June 2020: Inventory type Cost Net realisable value Raw materials $199,200 $212,420 Work in progress 171,900 162,950 Finished goods 290,400 263,880 Inventories are valued at the lower of cost and net realisable value. The value of inventory is derived by the method most appropriate to each particular class of inventory and the first-in-first-out basis is applied. Required: Explain the lower of cost and net realisable value basis of accounting for inventories.               Calculate the lower of cost and net realisable value for inventory.  Prepare the adjusting entry at 30 June 2020 to record any adjustments for the valuation of inventory.  Prepare an extract of the inventory note section for

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A: The inventory value is calculated as lower of cost or Net realizable value.

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A: Answer 1

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A: Inventory is the current assets of the company that is used in the production process.

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A: Inventory on hand on Feb 7 = 90 units x R17  = R1,530

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A: FIFO is the method of valuation of inventory in which the earliest inventory hold by the…

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A:

Q: Applying the Cost of Goods Sold Model The following amounts were obtained from the accounting…

A:

Q: Marin, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is…

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A: The inventory is the current assets of the company.

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Q: The following information was taken from the accounting records of Tampa Roofing Company for the…

A: Under fifo method of inventory valuation the units purchased first will be sold first. And in…

Q: On January 2020, Roel Corp. Has the following inventory purchases…

A: The inventory can be valued using various methods as FIFO, LIFO and weighted average method.

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A: 1. FIFO Method - Under FIFO Method, Inventory purchased first is sold first.

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Q: Kumar Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $214,000,000 at both…

A: No. Account Titles and Explanations Debit Credit a. Cost of goods sold $21,000,000…

Q: On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for its one inventory…

A:

Q: The following are the inventories for the years 2019, 2020, and 2021 for Parry Company: 1. Assume…

A: 1) The inventory will be sold at the cost of net realizable value whichever is less. The adjustment…

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A:

Q: Monami Company uses the weighted average method to determine the cost of its inventory.  Monami…

A: Perpetual inventory system records the inventory on real time basis.

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A: The financial transactions are initially recorded in the form of journal.

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Q: The inventory records of Kuffel Co. reflected the following information for the year ended December…

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Q: Grotesque Company which employed the FIFO retail method provided the following inventory data: 2020…

A: The retail inventory method calculates the ending inventory by multiplying the retail closing stock…

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A: Net realizable value is the net amount received from sales that is calculated by deducting the cost…

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A:

Q: Riverside Inc. began business on January 1, 2020. The firm made the following inventory purchases…

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Q: Sage Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following…

A: Solution: Inventory means goods are available for sale and raw materials used in the production of…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.