Zenith Manufacturing Enterprise extracted the following closing inventory figures and adjustment details at the end of its financial year:
- Raw materials inventory: ₦45,000
- Work-in-progress inventory: ₦28,000
- Finished goods inventory (at market transfer value): ₦75,000
- Provision for unrealized profit on closing finished goods: ₦15,000
What is the total value of manufacturing inventories (in Naira) to be presented under current assets in the Statement of Financial Position?
Cevap: 133000 ₦
Cevap
The total value of manufacturing inventories to be presented under current assets in the Statement of Financial Position is ₦133,000.
In the Statement of Financial Position of a manufacturing business, inventories are disclosed under current assets. Raw materials (₦45,000), work-in-progress (₦28,000), and finished goods are summed together. Finished goods transferred at market value must be stated at original prime/production cost by subtracting the provision for unrealized profit (₦75,000 - ₦15,000 = ₦60,000). Thus, total manufacturing inventories equal ₦45,000 + ₦28,000 + ₦60,000 = ₦133,000.
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Anahtar Kavram
Balance Sheet Presentation of Manufacturing Inventories and Provision for Unrealized Profit