Question
1.Neville has only two items of inventory on hand at its reporting date. Item 1 - Materials costing $24,000 bought for processing and assembly for
1.Neville has only two items of inventory on hand at its reporting date.
Item 1 - Materials costing $24,000 bought for processing and assembly for a customer
under a 'one off' order which is expected to produce a high profit margin. Since buying this
material, the cost price has fallen to $20,000.
Item 2 - A machine constructed for another customer for a contracted price of $36,000.
This has recently been completed at a cost of $33,600. It has now been discovered that, in
order to meet certain health and safety regulations, modifications at an extra cost of $8,400
will be required. The customer has agreed to meet half the extra cost.
Calculate the total value of these two items of inventory in the statement of financial
position.
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