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Question 3 A. Based on the fundamental principle of IAS2, identify two (2) circumstances where...

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Question 3 A. Based on the fundamental principle of IAS2, identify two (2) circumstances where the NRV of inventory might be lower than its cost? (2 mks) B. Storm Inc. had 500 units of Product X at 30 June 2020 in inventory. The product had been purchased at list price of $18 per unit and normally sells for $24 per unit. Additional information relating to the units in inventory: VAT - 10%; wharehousing cost - $0.55 per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit. Recently, Product X started to deteriorate but can still be sold for $24 per unit, provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit. Required: At what amount would Product X be required to be stated on 30 June 2020? Provide detailed analysis to support your answer. (6 marks)

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