The inventory balance of Gidimadjor Ltd are as follows for the year ended March 31, 2017 Opening Inventory GH¢ 28,875,000 Closing Inventory GH¢31,425,000 In the course of preparing the financial statements at March 31, 2017, the need for a number of adjustments emerged as stated below: i. The opening inventory was found to have been overstated by GH¢3,135,000 as a result of error in the calculation of values in the inventory sheets. ii. Some items included in the closing inventory at the cost of GH¢120,000 were found to be defective and were sold after the end of the reporting period for GH¢78,000. Selling cost amounted to GH¢4,500. Required: Discuss the above transaction in accordance to IAS 8; Accounting policies, changes in accounting estimates and correction of errors
The inventory balance of Gidimadjor Ltd are as follows for the year ended March 31, 2017
Opening Inventory GH¢ 28,875,000
Closing Inventory GH¢31,425,000
In the course of preparing the financial statements at March 31, 2017, the need for a number of
adjustments emerged as stated below:
i. The opening inventory was found to have been overstated by GH¢3,135,000 as a result of
error in the calculation of values in the inventory sheets.
ii. Some items included in the closing inventory at the cost of GH¢120,000 were found to be
defective and were sold after the end of the reporting period for GH¢78,000. Selling cost
amounted to GH¢4,500.
Required:
Discuss the above transaction in accordance to IAS 8; Accounting policies, changes in accounting
estimates and correction of errors.
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