Business – 10.1 Financial statements – Inventory valuation | e-Consult
10.1 Financial statements – Inventory valuation (1 questions)
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First calculate NRV for each item (Selling price – Costs to sell):
| Item | Cost | Selling price | Costs to sell | NRV | Value recorded |
| A | £12,000 | £15,000 | £2,000 | £13,000 | £12,000 (lower of cost/NRV) |
| B | £8,000 | £9,500 | £1,200 | £8,300 | £8,000 (lower of cost/NRV) |
| C | £5,000 | £6,000 | £1,500 | £4,500 | £4,500 (NRV lower) |
Total inventory value = £12,000 + £8,000 + £4,500 = £24,500.