Reference no: EM132752533

Pacific Trading Limited (PTL), a company which reports under IFRS, received merchandise that was damaged during shipment. Unfortunately, the contract terms were FOB Shipping Point and PTL was responsible for any damages during shipping. The amount of damage involved was too low to file an insurance claim. PTL has decided to repair and resell the damaged items as "refurbished." The following information is available:

                                                                                                                 Product 1              Product 2         Product 3

Volume 300 units 500 units 110 units Cost (per unit) including allocated shipping costs $53                        $17          $250

Estimated sales price after being refurbished (per unit)                                               82                        28           180

Estimated cost to sell (per unit) (e.g. commission)                                                     4                         3                 15

Estimated cost to rebuild (per unit)                                                                         15                        6             100

PTL has never previously impaired (written down) its inventory

REQUIRED

Problem 1. Calculate the net realizable value (NRV) for each Product on: (a) a per-unit basis, and (b) a total basis (i.e. for all units of the Product). Insert your answers in the applicable parts of the following table.

Problem 2. Calculate the "cost" on a total basis and insert your answers in the applicable parts of the following table.