QUESTION 1 (IAS 2) (30) Part a According to IAS 2 Inventories the general rule for valuation of inventories is that inventories are valued at the lower of cost or net realisable value. The following information relates to an auto parts dealer in Gweru who hold inventory types A, B, C, and D Details Selling price of inventory per unit 58,000 Purchase price of inventory per unit $5,000 Value Added Tax $1,000 Agent's commission per unit $50 Transportation cost per unit 550 Import duties per unit $500 Number of inventory units held as closing 15,000 stock B C $15.000 S10,000 $7,000 $8,000 $2,000 $3,000 $30 $25 550 550 $1,000 $1,500 2,000 5,500 D $25,000 $15,000 $4,000 $70 $50 $2,000 100 Required: Determine the value to be reflected in the financial statements for the following types of inventory A, B, C and D (16) Part b IAS 2 inventories has a valuation rule for inventories, with the following information from Daisy's Petals who produces a single homogenous product calculate the value to be recognised in the financial statements if cost of manufacture was $2.900.000 Additional information: Costs of completion are expected to cost $500,000 Selling expenses are expected to cost $100,000 Required: Determine the valuation for Daisy's Petals inventory to be recognised. Consider the following scenarios which are independent from each other in determining the value of inventories. Page 10 of 16 a) The sales value of the inventory is $2,700,000. (3) b) The sales value is $4,000,000. (4) Parte TMZ manufactures flags. The following information relates to January 2018. iw materials of $100 000were used in the manufacturing process during January Factory wages for January paid in cash $200 000 Electricity for January paid in cash $80 000 (only 80% relates to the factory) Depreciation on factory machines $40 000-70% of the time this machinery was used in producing inventory whereas 30% of the time it was standing idle. Depreciation on office equipment $10 000 -25%of the office equipment is used by factory administration staff and 75% is used by the head office administration staff