Question 1 Zenith Trading Establishment imports Mobility Aids for distribution to the local retail sector. During the year, January to December 2020, the company incurred following expenses: List price of purchase of mobility aids Trade discounts on purchase Handling costs relating to imports $250,000 5% Salaries of accounting department Sales commission paid to sales agents After sales warranty costs Import duties Freight expense Insurance of purchases Brokerage commission paid to indenting agents $5,000 $72,000 $36,000 $5,000 $10,800 $12,000 $7,500 $5,000 Zenith Trading Establishment bought these items on 1 April 2020 on credit terms which the company eligible for a 2% cash discount when the invoice was settled on 27 April 2020. Required: A. Calculate the total cost for purchases of the mobility aids. (4 marks) B. Explain the rationale for the treatment of each item of cost incurred. (6 marks) C. Closing inventory at year-ended 31 December 2020 amounted to $164,300 valued at cost. Prior to year-end some inventory items were damaged, and these will require repairs that will cost an estimated $1,280. After being repaired, these items can be sold for 90% of cost. The cost of these damaged items was $2,400. Calculate the value of closing inventories as at 31 December 2020. (3 marks) D. Outline the three major categories of inventories dealt with under IAS2. (3 marks) E. Explain the valuation of inventories that is to be presented in the financial statements based on principle and concepts outlined in IAS2. (4 marks) (Total 20 marks)