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Alejandro Limited is a public company that uses the lower-of-cost or ne realizable value (NRV) rule under the allowance method for reporting inventory on its Statement of Financial Position using the. The company also uses a perpetual inventory control system. At the end of 2018, Alejandro Inc. had four items in its inventory (not living animals), two o which management believed should be written down. The cost and NRV of the items are as follows: Item A Quantity Cost 170 NRY 100 160 Item B 260 80 Item C 9 100 150 140 Item D 200 100 120 Required: Calculate the amount by which the inventory should be written down if the lower-of-cost or NRV rule is applied on an item-by-item basis. Prepare the corresponding journal entry to record the write down. (3 marks) Assume Items A and B are related while Items C and D are also related. Calculate the amount by which the inventory should be written down if the lower-of-cost or NRV rule is applied by category. Prepare the corresponding journal entry to record the write down. (3 marks) Suppose that in 2019, the NRV of Item A rises to $180 by the end of the year. Prepare the journal entry to record the recovery in value, if any, under part (a). (3 marks) (d) Suppose that in 2019, the NRV of Item A rises to $180 by the end of the year. Prepare the journal entry to record the recovery in value, if any, under part (b). (3 marks) (e) Assume that the four items of inventory are living animals but not bearer plants. Describe the rule that must be followed by Alejandro Company under IAS 41 entitled "Agriculture" for measuring and reporting this inventory. (2 marks)

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