Solution-Calculate at what value the goods should be

Calculate at what value the goods should be presented

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Question - Your company uses IFRS as basis for financial reporting. In 2020 the company bought 2000 units of merchandise goods at 35 PLN/unit. The cost of transport of goods to the entity was 8 PLN/unit.

At the end of the year the managers value the goods. The goods could be sold on the market at 45 PLN/unit, but the company is obligated to sell a part of them to the client ABC under long-term contract. In such a case the company will receive the amount 43 per unit.

If the company is to sell the items on the market, it has to cover some commission of 7 PLN/unit. When selling the items to ABC, the company does not have to cover any costs (commission).

The part, which has to be sold to the client (ABC) is 67% of held units (67% of 2000).

Calculate at what value the goods should be presented in the balance sheet of the company at the end of the 2020.

Reference no: EM133003279

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Calculate at what value the goods should be presented

Reference no: EM133003279

Reference no: EM133003279

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