a Guo Company Ltd sells three different categories of tools (a) Guo Company, Ltd. sells three…

a Guo Company Ltd sells three different categories of tools
(a) Guo Company, Ltd. sells three different categories of tools (small, medium, and large). The cost and net realizable value of its inventory of tools are as follows.

_________________________Cost Net Realizable Value

Small…………………….HK$ 640,000………………….HK$ 730,000

Medium………………………2,900,000……………………..2,600,000

Large…………………………1,520,000……………………..1,485,000

Determine the value of the company’s inventory under the lower-of-cost-or-net realizable value approach.

(b) Sun Company, Ltd. understated its 2016 ending inventory by HK$284,000. Determine the impact this error has on ending inventory, cost of goods sold, and equity in 2016 and 2017.

a Guo Company Ltd sells three different categories of tools

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