Question
QUESTION 1 A. Alma, a supplier of rice to school and office canteens within the Kuching and Samarahan area, made the following purchases and supplies
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A. | Alma, a supplier of rice to school and office canteens within the Kuching and Samarahan area, made the following purchases and supplies during the year ended 31 December 2019.
Each bag of rice is sold at RM11 per bag. Due to a glut in the overall supply of rice, since October 2019, the cost price per bag has dropped. On 31 December 2019, if Alma were to make a new purchase, it would cost her only RM6 per bag. In order not to lose her customers, Alma would have to reduce her selling price.
At reporting date, 31 December 2019, 100 bags of rice were left unsold. Alma adopts the First In-First Out (FIFO) method of managing its inventory.
Required:
For each of the following situation, and in accordance with the measurement basis of MFRS 102 Inventories, determine the amount of inventory to be shown in the statement of financial position on 31 December 2019. Where appropriate, show journal entries for the inventory write-down.
(10 marks) |
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