The closing inventory of Mega Equip amounted to RM284,000 at cost, as at 31st December 2017. This total includes the following two inventory lines:

Product A 500 units which had cost RM150 each and which were included in the closing inventory at RM75,000. These items were found to have been defective. Remedial work were required and cost RM18,000 and they were then sold afterwards for RM200 each. Selling expenses were RM4000.

Product B 100 units which had cost RM100 each. After the year end, due to some damages they were sold for RM80 each, with selling expenses of RM1,500.

Required:

(i) Calculate the amounts of closing inventory that should be reported in the statement of financial position of Mega Equip Berhad as at 31st December 2017. (4 marks) (ii) State the costs that should not be included as part of the cost of inventory as highlighted by MFRS 102. (4 marks) (iii) How does one differentiate an asset whether it falls under property plant and equipment as per MFRS 116, or inventory as per MFRS 102? (