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T44:46 324 W 951% Done HW IAS2_3b5a4a77b63d7c33e 3f70fd0284c4211 IAS2 - Inventories Heidi Ltd. wholesales bicycles. It uses the perpetual inventory method and allocates cost to

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T44:46 324 W 951% Done HW IAS2_3b5a4a77b63d7c33e 3f70fd0284c4211 IAS2 - Inventories Heidi Ltd. wholesales bicycles. It uses the perpetual inventory method and allocates cost to inventory on a first-in first-out basis. The company's reporting period ends on March 31. On March 1, 2022, inventory on hand consisted of 350 bicycles at $82 each and 43 bicycles at $85 each. During the month of March, the following inventory transactions took place (assume all purchase and sales transactions are on credit): March 1 Sold 300 bicycles for 5120 each 3 Five bicycles were returned by a customer. They had originally cost $82 each and were sold for $120 each 9 Purchased 55 bicycles at 591 each 10 Purchased 76 bicycles at $96 each. 15 Sold 86 bicycles for $135 each. 17 Returned one damaged bicycle to the supplier. This bicycle had been purchased on 9 March, 22 Sold 60 bicycles for 5125 cach. 26 Purchased 72 bicycles at $98 each 29 Two bicycles sold on 22 March, were returned by a customer. The bicycles were badly damaged so it was decided to write them off. They had originally cost $91 each. 4:46 324 W 951% Done 17 22 HWIAS2_3b5a4a77b63d7c33e3f70fd0284c4211 Returned one camaged bicycle to the supplier. This bicycle had been purchased on 9 March Sold 60 bicycles for $125 each. Purchased 72 bicycles at $98 each. Two bicycles, sold on 22 March, were returned by a customer. The bicycles were badly damaged so it was decided to write them off. They had originally cost $91 each. 26 29 Required: 1. Calculate the ending inventory on March 31, 2022 and the cost of sales for the month of March 2022. 2. Calculate the gross profit on sales for the month of March 2022. (Hint: you need to record a journal entry for the write-off of the damaged bicycles returned on March 29, 2022) 3. IAS2 requires inventories to be measured at the lower of cost and net realizable value. Identify three reasons why the net realizable value of the bicycles on hand may be below their cost. 4. If the net realisable value of the bicycles falls to $92 each, record the journal entry (if necessary) to report the inventory at lower of cost and net realizable value

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