QUESTION 2 (10 MARKS: 24 MINUTES) GlovesHot Bhd manufactures and supplies a variety of gloves for both domestic and overseas markets. The company is in the process of preparing its financial statements for the year ended 31 December 2021. The company inventory information during the financial year is as follows: Item Quantity Cost/ Unit (RM) Estimated selling price/ Unit (RM) Completion and selling cost /Unit (RM) Fabric glove 50,000 1.50 2.50 1.20 Leather glove 10,000 5.00 7.00 1.40 Rubber glove 80,000 0.50 1.00 0.50 Kevlar glove 10,000 10.50 15.00 5.00 In line with MFRS 102 Inventories, GlovesHot Bhd has taken an approach to value its inventory at the Lower of Cost or Net Realisable Value (LCNRV). It applies the loss method and allowance account to record for the write down of the inventory to NRV. The accounting year of GlovesHot Bhd ends on 31 December. REQUIRED: (Show all the workings) (a) Calculate the LCNRV using the individual-item approach. (6 Marks) (b) Prepare the related journal entries as at 31 December 2021. (2 Marks) (c) Assume that as at 31 December 2021, the account of Allowance to Reduce Inventory to NRV had a credit balance of RM18,500. Determine the amount of the gain or loss that would be recorded due to the change in the Allowance to Reduce Inventory to NRV Account as in (b). Show the related journal entries.