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Jelly Galore (Pty) Ltd (Jelly Galore) is an entity that sells jelly worms. The entity uses the weighted average method to calculate inventory. The entity

Jelly Galore (Pty) Ltd (‘Jelly Galore’) is an entity that sells jelly worms. The entity uses the weighted average method to calculate inventory. The entity uses the perpetual inventory system. To date Jelly Galore has only sold jelly worms in one standard packet size. It is aiming to sell a large variety of jelly sweets in different sizes in the future. Jelly Galore is not a registered VAT vendor.

The following information for the year ended 31 December 2021 is available.



N$
Inventory 01/01/2021600 boxes390 000
Inventory 31/12/2021900 boxes?
Creditors 01/01/2021n/a40 000
Creditors 31/12/2021n/a60 000

Inventory is bought in bulk in boxes. Each box contains 100 packets of jelly worms. All inventories are bought on credit. The following purchases took place during the year.

DateNumber of boxesTotal Price (N$)
20 May 2021500341 000
22 September 2021150Refer to note 1

The following cash sales were made during the year:

DateNumber of packetsSelling price per packet (N$)
15 March 202130 0008
10 November 2021200Refer to note 2

Notes:

  1. 1. On 22 September 2021, 150 boxes were purchased at N$730 per box. Total delivery costs amounted to N$1 000. The supplier granted 5% discount on the retail price.
  2. 2. 50 of these boxes bought on 22 September 2021 were damaged during a hail storm on 31 October 2021. Jelly Galore had insured the inventory for a total value of N$500 000. Upon inspection of the damaged boxes, it was noted that some of the packets that were on top in the boxes were still usable although it could not be sold in the normal course of business. 200 of these packets were sold to a local children’s home at N$4 per packet on 10 November 2021. The remaining damaged goods were thrown away.


REQUIRED






Calculate the total cost of sales before the write off on inventory to net realizable value for Jelly Galore for the year ended 31 December 2021.

Calculate the value of the insurance claim in relation to the goods damaged in the hail storm

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