Based on the fundamental principle of IAS2, identify two (2) circumstances where the NRV of inventory...

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Based on the fundamental principle of IAS2, identify two (2) circumstances where the NRV of inventory might be lower than its cost? (2 mks) B. Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory. The product had been purchased at list price of $18 per box and normally sells for $24 per box. Additional information relating to the units in inventory: VAT - 10%; wharehousing cost - $0.55 per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit. Recently, due to poor handling and storage, several boxes appeared less than presentable however the contents were not compromized and MDC can still sell this item at $24 per unit, provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit. Required: At what amount would this IGA Cornflakes be required to be stated on 30 September 2022? Provide detailed analysis to support your answer. (6 marks) Based on the fundamental principle of IAS2, identify two (2) circumstances where the NRV of inventory might be lower than its cost? (2 mks) B. Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory. The product had been purchased at list price of $18 per box and normally sells for $24 per box. Additional information relating to the units in inventory: VAT - 10%; wharehousing cost - $0.55 per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit. Recently, due to poor handling and storage, several boxes appeared less than presentable however the contents were not compromized and MDC can still sell this item at $24 per unit, provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit. Required: At what amount would this IGA Cornflakes be required to be stated on 30 September 2022? Provide detailed analysis to support your answer. (6 marks)

Answer rating: 100% (QA)

According to the fundamental principle of IAS 2 International Accounting Standard 2 Inventories the ... View the full answer