QUESTION TWO

Presented below is data relative to Election petition company ltd at the end of the year 31^st January, 2021.

Inventory item	Number of units in inventory	Original cost per unit GH	Unit selling price GH
A	16000	12.0	25.0
B	18000	15.0	24.0
C	20000	10.0	21.0
D	18500	15.0	28.0
E	15000	14.0	26.0

Inventory items A, C and E have become obsolete as a result of new discoveries. An Auctioneer has agreed to find buyers for stock A, C, E for a 10% commission on the net sales values. It is estimated that inventory items A and E will have to be sold at 50% of the cost price whilst inventory item C will be sold at 75% of the selling price. Other incidental expenses (such as carriage, packaging etc) is estimated at GH2 per unit for all categories of inventotry.

You are required to determine the value of stock to be included in the statement of financial position as at 31 December 2021. State the basis of valuation of the inventory items. Show all calculations.