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Question - Viliandrys inventory includes three items for which the following details are available.
Product
Supplier
Net realisable value
A
3600
5100
B
2900
2800
C
4200
4100
The company receives 2.5% trade discount from its suppliers and it's also takes advantage of a 2% discount for prompt payment.
Required -
a) Calculate the total value of products A, B, C which should be shown in the inventory in the statement of financial position.
b) Explain the difference that changing from a weighed average to FIFO method of inventory valuation is likely to have in an entity's profit and loss.
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