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QUESTION 1 a. Kpogo Ltd has the following products in inventory at the end of 2019: Units Cost per unit GH XYZ (completed) 540 22 ABC (part complete) 280 26 Each product normally sells at GH34 per unit. Due to the difficult trading conditions, Kpogo Ltd intends to offer a discount of 15% per unit and expects to incur GH4 per unit in selling costs. GH10 per unit is expected to be incurred to complete each unit of ABC. Required: In accordance with IAS 2 Inventories, at what amount should inventory be stated in the financial statements of Kpogo Ltd as at 31 December 2019? (3 marks) b. According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must select and apply its accounting policies consistently from one period to the next and among various items in the financial statements. However, an entity may change its accounting policies under certain conditions. Required: Identify the circumstances under which it may be appropriate to change accounting policy in accordance with the guidance given in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. (2 marks) c. In accordance with IAS: 12 Income Taxes, deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Required: Explain temporary differences. (2 marks)

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