Hi.. please help me to answer this question... this question is the topic2 in financial accounting and reporting 2...

BKAR2023 FINANCIAL ACCOUNTING AND REPORTING II (A171) MINI CASE 2 INVENTORIES DUE DATE: 3 October 2017 (Tuesday) before 4.00 pm QUESTION 1 a. Fly High Bhd has the following four items in its ending inventory. Item A B C D Costs (RM) 2,000 5,000 4,400 3,200 NRV (RM) 2,100 4,950 4,625 3,830 Determine (i) the LCNRV for each item, and (ii) the amount of write down, if any, using (1) an item by item LCNRV evaluation and (2) a total-group LCNRV evaluation. QUESTION 2 a. Melada Bhd determined its ending inventory at cost and at LCNRV at December 31, 2015, December 31, 2016, and December 31, 2017, as shown below. 31 Dec 20X5 31 Dec 20X6 31 Dec 20X7 Costs (RM) 650,000 780,000 905,000 LCNRV (RM) 650,000 712,000 830,000 Instructions: (i) (ii) Prepare the journal entries required at December 31, 20X6, and at December 31, 20X7, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV is used. Prepare the journal entries required at December 31, 20X6, and at December 31, 20X7, assuming that a perpetual inventory system and reduced to LCNRV using the loss method. 1 QUESTION 3 MayLove Bhd is a company that specialised in producing office furnishings for industrycustomers as well as for walk-in customers. The furnishings are grouped based on its materials. The following information is available from the company's inventory records as at 31 December 2016. Historical cost - FIFO method (in total) Estimated selling price (per unit) Estimated cost to complete and sell (per unit) Number of units Wooden Furniture (RM) Bamboo Furniture (RM) Rattan Furniture (RM) Metal Furniture (RM) Glass Furniture (RM) Acrylic Furniture (RM) 213,500 122,500 178,500 21,500 50,000 25,000 4,125 4,375 5,125 1,875 2,500 750 750 1,750 3,500 1,000 1,250 375 40 32 40 40 56 40 Inventories are recorded at their cost. However, due to the market intense competition and declining in demand for company's product, the operation of MayLove Bhd has also affected and its inventory has declined in value. MayLove Bhd has taken an approach to follow the practice of valuing its inventory at the Lower of Cost or Net Realisable Value (LCNRV) method. MayLove applies the loss method and uses an Allowance Account to record for the write down of the inventory to net realisable value. REQUIRED: (Round your answers to the nearest RM) (a) Assuming that MayLove applies the LCNRV rule to each major groups of furniture. Determine the following items as at 31 December 2016: (i) Net Realisable Value (NRV) per major group, (ii) Lower-of-Cost-or-NRV (LCNRV) per major group, and (iii) The final amount of inventory. (b) Prepare the journal entry at 31 December 2016 to account for the write-down of the inventory to NRV. Assuming the use of a perpetual inventory system. 2 (c) (d) (e) Show a partial of MayLove's statement of financial position as at 31 December 2016 to present the information on its inventory. Assuming that at the year-end 2016, the account of Allowance to Reduce Inventory to NRV had a credit balance of RM300,000. For the financial year end 2016, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory at Net Realisable Value. Prepare the related journal entry. Explain how the application of LCNRV approach may result inconsistency in terms of its inventory measurement. 3