Question 5

Vacation Company presents the following information related to its inventory as at 31^st December 2017:

(Per unit)	Skis	Boots	Parkas
Historical cost	RM190.00	RM106.00	RM53.00
Selling price	212.00	212.00	73.75
Cost to sell (estimate)	19.00	19.00	2.50
Cost to complete (estimate)	32.00	29.00	21.25

Required:

Compute the net realizable value for each item.

Determine the carrying value of each item and compute the total inventory value to be reported in the financial statements of Vacation Company for the year ended 2017.

Briefly explain why MFRS 102 required that inventories to be valued at the lower of cost or net realizable value?