Ican 2026 Financial Reporting Question 7

Calculate the value that each of the above items will be included in the company’s year-end inventory.

You have been the finance director of Jamolaya Nigeria Ltd for ten years and you are finalising the year-end accounts. You have been advised by the warehouse manager of significant level of slow-moving inventories which are more than nine months old and would normally have been written down some months previously. The shareholders of Jamolaya Nigeria Ltd are trying to sell the company. The managing director and majority shareholder, Dr. Jamolaya has told you that it is not necessary to write-down the inventory in the year-end financial statements. You are sure that Dr. Jamoloya wants the financial statements to carry an inflated inventory valuation because he has found a prospective buyer. The managing director (Dr Jamolaya) has indicated to you that, if the proposed deal is successful, all employees will keep their jobs and you will receive a higher remuneration.