Reference no: EM132918982

Question - Langkaian Sdn. Bhd. has its year end physical stock take, a valuation cost of RM250,000 has been derived by the company in accordance to IAS 2.

However, on checking the figures, the following facts are discovered:

1. One of the inventories sheets that has a sub-total value of RM8,370 has been carried forward to the next sheet as RM8,730.

2. 200 units of inventories costing RM62 each have been carried into the total value column at RM26 each.

3. The inventories take includes 300 units samples costing RM50 each from potential suppliers. These items to be distributed to potential customers during the year end promotion.

4. The inventories count excludes 400 units of goods at RM40 each bought on credit and still not paid for as at the year-end.

5. The inventories count includes also damaged goods which originally cost RM6,600. These could be repaired at a cost of RM600 and subsequently sold for RM6,900.

6. The inventories count includes 250 units of goods, recorded at cost RM45 each received from supplier on a sale or return basis, these items to be sold at RM55 each.

7. The inventories count excludes 350 units of goods, originally cost RM40 each, sent to a customer on a sale or return basis at a price of RM50 each.

The customer has not yet indicated that whether these goods have been accepted or will eventually be returned.

Required - Calculate the inventories figure with explanation on the accounting treatment of each item for inclusion in the annual accounts of Langkaian Sdn. Bhd., show workings for all necessary adjustments from items 1 to 7 above.