I need help with E6-2...

Kale Wilson, an auditor with Sneed Chartered Accountants is performing a review of Platinum company's inventory account. Platinum did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was pound 740,000. However, the following information was considered when determining that amount. 1. Included in the company's count were goods with a cost of pound 250,000 that the company is holding on consignment. The goods belong to Superior Ltd. 2. The physical count did not include purchased by Platinum with a cost of pound 40,000 that were shipped FOB destination on December 28 and did not arrive at Platinum's warehouse until January 3. 3. Included in the inventory account was pound 17,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. 4. The company received an order on December 29 that was boxed and sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price and pound 49,000 and a cost of pound 33,000. The goods were not included in the count because they were sitting on the dock. 5. Included in the count was pound 48,000 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Platinum's products it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, "Since that is what we paid for them, after all