QUESTION 1

KitchenStore Bhd (KSB) is a kitchenware company operating in Kedah. The company is in the process of preparing its annual financial statements for the year ended 31 December 2019. KSB applies the Loss Method and the Allowance to Reduce Inventory to Net Realisable Value (NRV) Account to record the write down of the inventory. The relevant inventory costs and market data on 31 December 2019 is summarised in the schedule below:

Item	Quantity	Cost per Unit (RM)	Estimated Selling Price per unit (RM)	Completion and Selling Cost per unit (RM)
Plate	2,000	6.70	4.00	1.20
Bowl	1,500	8.30	5.20	0.70
Skillet	800	70.00	86.00	11.00

REQUIRED:

1. Calculate the LCNRV using the individual-item approach and determine the final amount of inventory. Prepare the relevant journal entry required as at 31 December 2019.

(b) Referring to the (a) question, determine the amount of gain or loss that would be recorded by KSB if there is a credit balance of RM15,150 in the Allowance to Reduce Inventory to NRV Account. Show the related journal entry.

3. Explain how the estimations of the Net Realization Value (NRV) are made according to MFRS 102 Inventories, Para 30.