Accounting · Valuation of Inventory
An audit junior obtains the following extract of an aged inventory report: Inventory CodeOriginal Cost () SellingPrice()Costs to Sell () CarryingAmount()X07000312,00020,2002,00012,000X07900114,50016,0002,50014,500X08400018,00026,0003,00023,000 According to IAS 2 Inventory, valuation should be at the lower of cost and net realizable value (NRV). What is the corrected inventory value and the statement regarding the current carrying amounts?
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- 1Total inventory should be $44,500; inventory is currently overstated by $5,000
- 2Total inventory should be $43,500; inventory is currently overstated by $6,000✓
- 3Total inventory should be 49,500; inventory is currently understated by $4,000
- 4Total inventory should be $41,500; inventory is currently overstated by $8,000
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Total inventory should be $43,500; inventory is currently overstated by $6,000
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