Investor Presentaiton
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
Solution:
(i) FIFO (2 units at Rs 30 p.u.) + (4 units at Rs 40 p.u.) = Rs 220/-
(ii) Weighted Average Cost:
(3 units at Rs 20 p.u.) + (5 units at Rs 30 p.u.) + (4 units at Rs 40 p.u.) = Rs 30.83 p.u.
12 units
Six pencils remain: 6 units at Rs 30.83 p.u. = Rs 185/-
(iii) LIFO : (3 units at Rs 20 p.u.) + (3 units at Rs 30 p.u.) = Rs 150 / -
CAT
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Measurement
Net Realizable Value
Net realizable value is the estimated selling price in the
ordinary course of business less estimated costs of
completion and the estimated costs necessary to make
the sale
Evaluation of net realizable vale is critical if
inventories -
(1) are damaged,
(2) have become wholly or partially
obsolete,
(3) selling prices have declined, or
(4) if the estimated costs of completion or
the estimated costs to be incurred to
make the sale have increased.
10/31/2016
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