1. Ko-furn prices its furniture using a normal 30% mark-up policy. An inventory count carried out at 31 December 2021 valued inventory at selling price of $325,000. This included two board tables at normal selling price of $20,800 each, which the directors have decided should be reduced in price to $5,000 each.

why is the answer not correct to calculate closing inventory?

cost = selling price/ 100%+ mark up

325000/130%= 250000

NRV= 5000 x2

20800x2 - 100000= 31600

250000-31600= 218400

someone pls explain

Question 16 Ko-Furn Limited is an office furniture manufacturer. The following is a list of balances extracted from its accounting records at 31 December 2021: Cr $000 Dr $000 540 500 180 392 152 214 366 16 I 12 18 518 Land, at valuation Buildings: cost Buildings: accumulated depreciation at 1.1.21 Equipment: cost Equipment: accumulated depreciation at 1.1.21 Inventory at 1.1.21 Trade receivables Provision for doubtful debts at 1.1.21 Prepayment at 1.1.21 Accrual at 1.1.21 Cash Trade payables 8% debentures: 2025 Share capital: ordinary 50c shares : 10% redeemable $1 preference shares Share premium Retained earnings Sales Purchases Wages and salaries Distribution costs Other administrative expenses Debenture interest paid Corporation tax Disposal account Interim dividend paid on preference shares Interim dividend paid on ordinary shares 201 100 50 60 350 606 2,924 976 540 200 360 4 12 20 3 40 4,677 4,677 on