Question
As per AS- 2 what should be the valuation of inventory
from the following information: Purchase Price = 2000 Trade Discount = 200 Cash Discount = 100 Delivery Cost = 500 Import Cost = 600Solution
Valuation of Inventory using AS-2 considers cost of inventory as cost of purchase, cost of conversion and other cost incurred to bring inventory to its present condition. It ignore Cash discount. So, Valuation of Inventory = Purchase Price + Delivery Cost + Import Cost – Trade Discount = 2000+500+600-200 = 2900
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