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Determine the value the inventory is to be carried

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Question - Khalid purchased goods with an invoice value of R150,000 for resale purposes. The company incurs R10,000 to transport these goods to the warehouse. The company was entitled to a 10% discount because they purchased in bulk. Besides that, as Khalid pays to his suppliers early they were further entitled to a 5% discount for early payment.

During year end, the management noticed that the inventory were slow moving and they were unable to sell it, thus the management decided to make a little modification to the inventory so as to improve the attractiveness of the inventory. A further R12,000 will be spent on the inventory after which they will be able to sell the inventory for an estimated value of R153,000.

Required: Determine the value the inventory is to be carried.

Reference no: EM132031094

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