1. The inventory balance of Gidimadjor Ltd are as follows for the year ended March 31, 2017

GH000

Opening Inventory	28,875
Closing Inventory	31,425

In the course of preparing the financial statements at March 31, 2017, the need for a number of adjustments emerged as stated below:

1. The opening inventory was found to have been overstated by GH3,135,000 as a result of error in the calculation of values in the inventory sheets.
2. Some items included in the closing inventory at the cost of GH120,000 were found to be defective and were sold after the end of the reporting period for GH78,000. Selling cost amounted to GH4,500.

Required:

Discuss the above transaction in accordance to IAS 8; Accounting policies, changes in accounting estimates and correction of errors. (3 marks)