12 Martha started a business trading in wooden toys on 1 July 20-5. At the end of the first year of trading, she valued her inventory at the lower of cost and net realisable value. a Explain the meaning of the term 'cost! b Explain the meaning of the term 'net realisable value' c Explain how Martha is applying the accounting principle of prudence by valuing her inventory at the lower of cost and net realisable value. Martha provided the following information about her inventory on 30 June 20-6 at the end of her first year of trading: Code number Number of units Cost price per unit $ 21 2 Selling price per unit $ DZ22 LS15 SH49 410 290 17 15+$2 300 25 The cost per unit of LS15 does not include carriage inwards of $2 per unit. d Calculate the value of each type of inventory. Show your calculations. e Explain the basis for your valuation in each case. 18 22 36