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tatiyna
2 years ago
11

As of December 31, year 2, a company has an inventory item that was originally purchased for $80 in year 1. The inventory item w

as written down to its net realizable value of $60 as of December 31, year 1. As of December 31, year 2, the inventory item had a net realizable value of $75 and a replacement cost of $65. Normal profit margins for this company are 20%. Under IFRS, what is the carrying amount of the inventory item as of December 31, year 2
Business
1 answer:
Naily [24]2 years ago
8 0

The net realizable value of the inventory as of December 31, year 2, according to IFRS is <u>$75</u>.

<h3>What is net realizable value under IFRS?</h3>

Under the IFRS, inventories should be stated at the lower of cost and net realizable value. The net realizable value equals the selling price less the estimated costs of sale.

<h3>Data and Calculations:</h3>

Inventory purchase cost = $80

Net realizable value in year 1 = $60

Net realizable value in year 2 = $75

Replacement cost = $65

Normal profit margins = 20%

Thus, the net realizable value of the inventory as of December 31, year 2, according to IFRS is <u>$75</u>.

Learn more about net realizable value at brainly.com/question/794345

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3 years ago
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Romashka [77]

Answer:

Courts Distributors and Eastinghouse Corporation

Dispute over Contract Price

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