Homework Answers
As per IAS-2, Inventories are to be stated at LOWER of Cost and Net Realisable Value (NRV).
Here, Total cost of Daisy's Petals Inventory is :
Cost of Manufacture = $29,00,000
NRV = Sales Value - Expected cost of completion
(a) NRV = $27,00,000-$5,00,000 = $22,00,000
Thus, Inventory Value = Lower of Cost and NRV
= Lower of $29,00,000 and $22,00,000
= $22,00,000
(b) NRV = $40,00,000-$5,00,000 = $35,00,000
Thus, Inventory Value = Lower of Cost and NRV
= Lower of $29,00,000 and $35,00,000
= $29,00,000
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