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estion #12: Mazhar Sons deal in second hand computers which they import from Australia and...

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estion #12: Mazhar Sons deal in second hand computers which they import from Australia and after necessary repair and servicing sell in rural areas of Punjab. The repair costs incurred by them also include replacement of various parts. Due to low capital investment in the business, they import each lot only when the previous lot is expected to be disposed of by the time new lot reaches Pakistan. In their line of business 5% is considered as normal loss. On 25th June 2001. they received a lot of 500 computers and incurred the following costs: LC charges paid to bank Surcharge Clearing and forwarding charges Rs. 5,000,000 250,000 100,000 On 30 June 2001, this was the only inventory they held. Subsequent to 30h June, they incurred servicing charges amounting to Rs. 300 per PC and a total cost of Rs. 480,000 on repairs and replacement of parts. The sale of these PCs cannot be made unless MS Office is installed. They incurred a total cost of Rs. 96,000 as installation charges. 20 PCs out of the lot were found totally damaged and were discarded before servicing. Each good PC is expected to be disposed of at an average selling price of Rs. 15,000. Required: Value of inventory as on 30th June 2001

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