AP1 Closing inventory

Hi everybody,
I don't know how to value the closing stock:
"No entries have been made for closing stock for the year-end 31 December 2000. Closing stock has been valued at cost at £17500. Included in this figure are some items costing £1000 that will be sold for £1500."
Could you help me please?
Thanks
I don't know how to value the closing stock:
"No entries have been made for closing stock for the year-end 31 December 2000. Closing stock has been valued at cost at £17500. Included in this figure are some items costing £1000 that will be sold for £1500."
Could you help me please?
Thanks
0
Comments
So if I have understood correctly, the closing stock will be valued at £17500.
Is that correct?
If the question said
"Closing inventory has been valued at £20,000 included in this figure is stock that cost £5000 but has a NRV of £4000 " You would want to use the NRV figure in your total as this is the lower figure.
You would need to adjust the Inventory by taking out the cost price and adding in the NRV.
20,000 - 5000 +4000 = 19,000
So you can see here that we have reduced the overall total.
I agree with Uknitty's explaination, but Closing stock is £17,500 including £1000 to be sold at £1500.
So, I would say £17,500-£1,500+£1,000=£17,000.
As the stock is to be sold at £1,500, its not sold yet. So its value is £1,000 unless stated otherwise.
Inventory is valued at the lower.
Hope this helps. Eventhough I get different answer, All depends on how you read the question
The £500 profit you refer to removing has not already been included in the inventory valuation as the total figure is valued at cost already ?
Yeah I think your right. I've just read it again.
Lifeisstrange, ignore my previous