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Leggo Pty Ltd is a manufacturer and retailer of building blocks and brick sets.

Leggo (Pty) Ltd (Leggo) is a manufacturer and retailer of building blocks and brick sets. The sets range from kids to more advanced experts which are intended for adult builders. The entity has a 31 December year-end. Leggo entered the following inventory transactions during December 2022 for their Globetrotter - expert building sets: The selling price per unit amounted to R1 000 during December 2022. Leggo uses a perpetual inventory system. A competitor had entered the market, affecting the selling price of the Globetrotter - expert building sets. On 31 December 2022, the selling price was redetermined to be R900 per unit, with selling expenses amounting to R25 per unit. 2.1) Calculate the cost of sales for December 2022 and the value of inventory on hand at 31 December 2022 for Leggo (Pty) Ltd's Globetrotter - expert building sets using each of the following cost formulas: (i) First-in-first-out (FIFO); and (17 marks) (ii) Weighted average cost method. (16 marks) 2.2) Prepare an extract from the Statement of Profit or Loss and Other Comprehensive Income of Leggo (Pty) Ltd for the month of December 2022 in compliance with the requirements of International Financial Reporting Standards (IFRS), for both the First-in-first-out (FIFO) and Weighted average cost methods. (5 marks) 2.3) Discuss where the inventory balance will be disclosed in the Statement of Financial Position of Leggo (Pty) Ltd, supporting your reason with evidence from International Financial Reporting Standards (IFRS)

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