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Question - The financial statements of PLC Pte Ltd had been completed but not yet released to shareholders. The closing inventory of PLC Pte Ltd amounted to $332,000 as at 31 December 20X1, its financial year-end. This total included two products with the following information:
(i) 150 units of Product A were carried at a cost of $12 each. On 2 January 20X2, they were sold for $9 each, with total selling expenses of $100.
(ii) 300 units of Product B were carried at a cost of $15 each. The products were found to be defective on 31 December 20X1. On 2 January 20X2, remedial work was conducted and cost $700 and shortly after, they were then sold for $20 each. The selling expenses were $250.
Required - Illustrate and explain the accounting treatment by PLC Pte Ltd for the above.
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