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Reliable Bhd. (Reliable) is a distributor of home appliances. As at year ended of 31 May 2021, Reliable has the following closing inventories: Products Quantity
Reliable Bhd. (Reliable) is a distributor of home appliances. As at year ended of 31 May 2021, Reliable has the following closing inventories: Products Quantity Cost per unit Selling price per Units RM unit RM Washing machine 120 1,800 2,400 Refrigerators 65 2,450 4,500 The following information is available: 1. A binding sales order for 35 units of washing machine at RM1,700 have been received on 30 May 2021. Delivery will take place on 10 June 2021. The remaining units can be sold at the normal selling price. A sales commission of 2% on the selling price will be paid for every sales of washing machine (this apply to binding sales order and normal sales order). 2. Refrigerators costing RM49,000 in total were accidentally damaged. These units can only sold at a discounted price of RM20,000, for which a transportation cost of RM3,200 need to incurred. The balance of the refrigerators can be sold at the normal selling price. Required: Explain how the closing inventory values of the washing machine and refrigerators should be accounted for as at 31 May 2021 in accordance with IAS 2 / MFRS 102 Inventories
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