Moon Decor Ltd sells decorative candles.It uses the perpetual inventory method and FIFO cost allocation method.

The transaction details for one item, Decoration C1, are outlined below:

Opening Balance and Purchases on credit:

Date

Transaction

Details

1/1/20

Opening Balance

100 units$5.20

2/1/20

Purchases

125 units at a cost per unit of $5.40

18/1/20

Purchases

80 units at a cost per unit of $5.60

19/1/20

Purchase Returns

15 units returned to supplier from the purchase on 18/1/18

30/1/20

Sales

Total Sales on credit for the month: 110 units at $12.

30/1/20

Freight charges

Total Freight inward costs paid in cash for the month: $25.

30/1/20

Operating expenses

Total operating expenses paid in cash are $200.

31 /1/20

Stocktake

180units on hand

18 of the units on hand (purchased on 2/1/20) are damaged and can only be sold for $1 each with costs to sell of 20 cents each.

(a)Calculate the closing inventory value of Moon Decor Ltd at 31 January 2020 in accordance with AASB102. Justify all calculations.

Damaged Undamaged

Qty

Cost

NRV

Lower

Value of Inv