Required:
(a) Advise the company at what value inventory should be measured at 30 June 2021. Justify your answer using the relevant principle in the accounting standard, NZ IAS 2. Also prepare any adjusting journal entries required on 30 June 2021. (7 marks)
(a) Advise the company at what value inventory should be measured at 30 June 2021. Justify your answer using the relevant principle in the accounting standard, NZ IAS 2. Also prepare any adjusting journal entries required on 30 June 2021. (7 marks)
(b) With reference to the relevant principle described in (a) above, briefly explain a possible advantage and a disadvantage of applying the same in valuing the inventory in the preparation of general-purpose financial statements for the year ended 30 June 2021.
(c) The New Zealand Conceptual Framework states that “an asset is a resource controlled by an entity.” Discuss this statement in relation to inventory items held by an agent for sale on consignment.
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