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uestion 2 CA) Al pha Limited (Alpha") manufactures plastic water tan 30June2016, its closing inventory consisted of 950kg also 250 finished units (plastic water tanks). ures plastic water tanks for the farming industry. On nsisted of 95okg of plastic resin raw material, and Plastic e purchase price of plastic resin was sa per kg throughout the year to 30 June 2016 Delive very costs an additional $o.50 per kg. Alpha has a policy of always keeping plenty of plastic resin in inventory, as its supply can be unreliable. However, close to the year-end, the price of plastic resin collapsed due to market oversupply. The existing inventory of plastic resin can be sold in the market for $i.80 per kg net of all costs-L Tanks Each tank requires 1o kg of plastie to manufacture, plus each unit incurs $25, in conversion costs (labour and overhead). Alpha sells the tanks for $10o. It is expected that this price will drop to 9o)as a result of the fall in the market price of plastic. All completed units sold by Alpha incur a $6 selling cost. Required: In accordance with HKAS 2 Inventories, determine the value of closing inventory in the books of Alpha at 30 June 2016. (B) Beta Piano Limited ("Beta") manufactures customized pianos for concert halls. On 1 7 July 2016, Beta signed a contract to deliver a concert piano for $150,0oo. Under the contract, Beta is also obligated to provide a one-year maintenance service. If sold separately, the piano and the maintenance service would have cost $140,000 and 16,000 respectively. Beta delivered the concert piang and received payment on 1 gust 2016. Beta prepares financial statements every mont Required: In accordance with HKFRS 15 Revenue from Contracts with Customers, (a) determine the transaction price would be allocated to the piano and the (4 marks) maintenance service; and (b) prepare journal entries on August 2016 and 31 August 2016 relating to the (6 marks) contract of 1 July 2016

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