Toey Ltd has provided the following information about the total production cost and estimates of realisable value of three lines of shoes they produce within the same class of inventory: Packaging and freight are necessary in order to be able to sell the shoes.What is the value of the inventory in accordance with AASB 102?
A) $34,000
B) $40,000
C) $32,000
D) $24,000
E) None of the given answers.

Question

Toey Ltd has provided the following information about the total production cost and estimates of realisable value of three lines of shoes they produce within the same class of inventory:  Packaging and freight are necessary in order to be able to sell the shoes.What is the value of the inventory in accordance with AASB 102?
A) $34,000 
B) $40,000 
C) $32,000 
D) $24,000 
E) None of the given answers.

Quizplus · Accepted Answer

According to AASB 102, the value of inventory should be based on the lower of cost or net realisable value. Here, the cost of the inventory is $40,000, which is higher than the net realisable value of $32,000 ($12,000 + $10,000 + $10,000). Therefore, the inventory should be valued at $32,000.

Toey Ltd Has Provided the Following Information About the Total