Calculate the value of closing inventory as provided

Reference no: EM132727594

Veronica Fresh is a wholesale distribution business that sells a flavoured cheese product to supermarkets. The following relates to the business's activities during January 2020:

January 1 Opening inventory 2000 boxes-cost $8.40

6 Sales 800 boxes-selling price $14.00

8 Purchases 1000 boxes-cost $9.00

18 Sales 600 boxes-selling price $14.00

23 Purchases 1500 boxes-cost $9.60

27 Sales 900 boxes-selling price $14.50

31 Closing inventory (as per physical stocktake) 2200 boxes

Additional information

i Two hundred boxes from the 8/1 purchase have passed their use-by date and cannot be sold for human consumption. However, they can be sold as poultry feed for $2 per box.

ii Transportation from the supplier to Veronica Fresh costs $1 per box. Transportation from Veronica Fresh to supermarkets costs $1.20 per box and would also apply to boxes sold for poultry feed. Veronica Fresh pays both sets of transportation costs.

Required:

Problem 1: Calculate the value of closing inventory as provided for in AASB 102, applying the FIFO (first in-first-out) method. Justify all aspects of your calculation.

Reference no: EM132727594

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