Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

At the end of the year, a company finds that part of its inventory has been damaged. This inventory first cost $2000 and, at present, would cost $1900 to replace. It would usually be sold for $2400, but it can now be sold only for $2200 if repairs costing $400 are carried out. What amount should the damaged inventory be reported at in the financial statements?

  • A$1800
  • B$1900
  • C$2000
  • D$2200

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