Herman Company has three products in its ending inventory. Specific per unit dat
ID: 2345757 • Letter: H
Question
Herman Company has three products in its ending inventory. Specific per unit data for each of the products are as follows:Product 1 Product 2 Product 3
Cost $ 21 $ 84 $ 66
Replacement cost 19 79 56
Selling price 32 102 83
Disposal costs 11 31 11
Normal profit margin 8 18 9
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Required:
What unit values should Herman use for each of its products when preparing its financial statements according to International Financial Reporting Standards? (Omit the "$" sign in your response.)
Product NRV Cost Lower of Cost or Market
1 $ $ $
2 $ $ $
3 $ $ $
Explanation / Answer
IFRS == lower of cost or NRV Product 1 = 21 Product 2 = 71 Product 3 = 66 So for Product 1 NRV = 32 - 11 = 21 cost = 21 Market cost = replacement cost = 19 lower of cost or market = 19 Product 2 NRV = 102 -31 =71 cost = 84 Market cost = replacement cost = 79 lower of cost or market = 79 Product 3 NRV = 83-11 = 72 cost = 66 Market cost = replacement cost = 56 lower of cost or market = 56