Calculate the cost of sales in the statement of profit of

Question

QUESTION

	2017 N$
100 CDs at $3.30 each (including 10 % VAT)
20 Tuition computer programs at cost price of $180 each
10 central processing units of which only takes one CD at a cost of $ 1700 each
30 central processing units of which the memories were increased
Original cost price	1 900
Cost of increasing money	300
Total cost per unit	2 200
The following information was also obtained on 26 April
Sales value of CDs: $3.50 each (including 10% VAT)
Net realisable values:
Tuition programs	150
One-"CD"-central processing unit	1 500
Increased memory-central processing units
With increased memory	3 000
Without increased	2 000
It is considered undesirable to remove the already installed increased memory device

a) Determine at what unit price each type of inventory item shall be measured at on 31 March 2017

b) Prepared the journal entries on 31 march 2017 to reflect the changes needed in terms of reflecting the correct measurements in a) above. Journal narrations are not required.

c) Mention the three ways in which net realisable value is determined in general.

1	Inventory on hand: 20 units                   -14@ $1.80 each
	-     6 @ $2.00 each
5	Purchased 60 units @ $3.00 each
10	Purchased 35 units @ $4.00 each
11	Sold 30 units
15	Purchased 40 units @$5.00 each
19	Sold 50 units
22	Purchased 100 units @ $4.00 each
30	Sold 60 units

The selling price during April amounted to $6.00 per unit.

A perpetual inventory system is being used and on 30 April 2017 it was determined that the normal selling price of the units had dropped to $5.00 per unit because a competitor had entered the market. Normal selling expenses amount to $1.00 per unit.

Required:

a) Calculate the cost of sales in the statement of profit of loss and other comprehensive income for April and the value of inventory on hand at 30 April 2017.

b) Disclose the above information in the statement of profit or loss and other comprehensive income for April 2017 in compliance with the requirements of IFRS.