QUESTION 2 (20 MARKS) Sandra Bhd manufactures and sells ceramic pots. Sandra Bhd owns a factory building and several retail outlets in Seremban. The company purchases the raw materials from Indonesia, involving foreign currency transaction. The purchase price of the raw materials includes refundable purchase tax. The process of mixing the raw materials is done by using a machine. The mixing machine is operated by a factory worker. Workers are employed to remove the pots from the reusable molds. The dried pots are stored in a rented store room (Store A) waiting for the next process that is painting and glazing. All factory workers are paid fixed monthly salary. Sandra Bhd rents a store room (Store B) to keep the ready-to-sell pots before transporting them to its retail outlets and customers' shops. The company incurs transportation cost to transport the pots to its retail outlets and customers' shops. Further selling costs are incurred in the sale of the pots. There are two managers employed by Sandra Bhd. The operation manager supervises the factory and the administration manager is responsible for administration, finance, purchases and sales. Required: a. Define the term 'inventory and its measurement in accordance to MFRS102 Inventories. (4 marks) (CLO2:PLO7:C3) b. List any FOUR (4) costs that should be included in determining the total cost of inventory for pots. (4 marks) (CLO2:PL07:C3) c. As at 31 January 2020, a physical stock count was carried out to determine the value of the inventories for pots held by Sandra Bhd. The unsold pots were valued at RM140,000. Due to the flood in January 2020, 40% of these pots were damaged and could only be sold at RM48,800. The cleaning cost for these damage pots was estimated at RM800. The remaining pots (undamaged) could sell at RM88,000. The selling cost of these remaining pots was RM2,000. I. Determine the value of the inventory for pots as at 31 December 2020 in accordance with MFRS 102 Inventories. (8 marks) (CLO2:PL07:C3) II. Determine the write down amount for the above calculation. (4 marks) (CLO2:PL07:C3) QUESTION 2 (20 MARKS) Sandra Bhd manufactures and sells ceramic pots. Sandra Bhd owns a factory building and several retail outlets in Seremban. The company purchases the raw materials from Indonesia, involving foreign currency transaction. The purchase price of the raw materials includes refundable purchase tax. The process of mixing the raw materials is done by using a machine. The mixing machine is operated by a factory worker. Workers are employed to remove the pots from the reusable molds. The dried pots are stored in a rented store room (Store A) waiting for the next process that is painting and glazing. All factory workers are paid fixed monthly salary. Sandra Bhd rents a store room (Store B) to keep the ready-to-sell pots before transporting them to its retail outlets and customers' shops. The company incurs transportation cost to transport the pots to its retail outlets and customers' shops. Further selling costs are incurred in the sale of the pots. There are two managers employed by Sandra Bhd. The operation manager supervises the factory and the administration manager is responsible for administration, finance, purchases and sales. Required: a. Define the term 'inventory and its measurement in accordance to MFRS102 Inventories. (4 marks) (CLO2:PLO7:C3) b. List any FOUR (4) costs that should be included in determining the total cost of inventory for pots. (4 marks) (CLO2:PL07:C3) c. As at 31 January 2020, a physical stock count was carried out to determine the value of the inventories for pots held by Sandra Bhd. The unsold pots were valued at RM140,000. Due to the flood in January 2020, 40% of these pots were damaged and could only be sold at RM48,800. The cleaning cost for these damage pots was estimated at RM800. The remaining pots (undamaged) could sell at RM88,000. The selling cost of these remaining pots was RM2,000. I. Determine the value of the inventory for pots as at 31 December 2020 in accordance with MFRS 102 Inventories. (8 marks) (CLO2:PL07:C3) II. Determine the write down amount for the above calculation. (4 marks) (CLO2:PL07:C3)
