Glasgow clothing Ltd (Glasgow) purchases plain heavy duty jackets from a Turkish supplier and then applies either a waterproof or an anti-corrosive coating to them before selling them. You are given the following information:

1. The FIFO method of valuation is applied for inventory valuation purposes.

2. Details of opening inventory and purchases of plain jackets from the Turkish supplier were as follows during 2016

	Units	Cost per unit
Opening inventory of plain jackets	17,500	28
Purchase of plain jackets in March 2016	20,000	29
Purchase of plain jackets in July 2016	5,000	31
Purchase of plain jackets in October 2016	4,000	32

3. Jackets counted in the warehouse at the inventory count on 31 December 2016 were as follows: Plain jackets 10,000 units Waterproof 9,000 units Anti-corrosive 3,000 units.

4. As a result of the increase in crude oil prices, the cost of both the waterproof and anti-corrosive coating increased from 1 October 2016. Since then Glasgow has coated 4,000 units of waterproof jackets and 2,000 units of the anti-corrosive jackets. Costs of coating the jackets, per unit, during 2016 were as follows:

	Waterproof	Anti-Corrosive
Coating Cost before 1/1/16	36	44
Coating Cost after 1/1/16	42	48

5. From 1 January 2017 new legislation has banned the use of synthetic yarn in anticorrosive jackets. As Glasgows jackets contain synthetic yard, no further anticorrosive jackets will be sold for the foreseeable future. Since 1 January 2017 the company has secured a contract with an Italian company to sell off all 3,000 units of anti-corrosive jackets. Selling prices and delivery cost per unit of each type of jacket in 2016 and expected prices and costs for 2017 are as follows:

	Water Proof	Anti-Corrosive
Selling prices: During 2016	86	128
Expected for 2017	95	60
Delivery costs: During 2016	7	12
Expected for 2017	9	14

6. A delivery of 1000 of plain jackets was received into the warehouse on 2 January 2017. These were ordered on 20 December 2016 and invoiced to Glasgow in 23 December 2016, but they were still in transit from the Turkish supplier when the inventory count was carried out on 31 December 2016. The entry Dr Purchases 32,000 and Cr Trade payables 32,000 was made on 28 December 2016 in respect of the invoice for these jackets.

Required:

(i) Calculate the value of inventories to be disclosed in the financial statements of Glasgow as at 31 December 2016 in accordance with IAS 2 Inventories.

(ii) Explain how the goods in transit at 31 December 2016, and the associated invoice, described in item 6 above, should be treated in the accounts for 2016