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26 on january 2 of the current year ltti co entered

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26. On January 2 of the current year, LTTI Co. entered into a three-year, non-cancelablecontract to buy up to 1 million units of a product each year at $.10 per unit with a
minimum annual guarantee purchase of 200,000 units. At year end, LTTI had onlypurchased 80,000 units and decided to cancel sales of the product. What amountshould LTTI report as a loss related to the purchase commitment as of December 31 ofthe current year?
27. A company determined the following values for its inventory as of the end of its fiscalyear:Historical cost $100,000Current replacement cost 70,000Net realizable value 90,000Net realizable value less normal profit margin 85,000Fair value 95,000Under IFRS, what amount should the company report as inventory on its BalanceSheet?
28. A company manufactures and distributes replacement parts for various industries.As of December 31, year 1, the following amounts pertain to the company's inventory:Item Cost NRC Sale price CtSoD NPMBlades$41,000 $38,000 $50,000 $2,000 $15,000Towers 52,000 40,000 54,000 4,000 14,000Gen 20,000 24,000 30,000 2,000 6,000Gears 80,000 105,000 120,000 12,000 8,000What is the total carrying value of the company's inventory as of December 31, year 1,under IFRS?
29. A manufacturer has the following per-unit costs and values for its sole product:Cost 10.00Current replacement cost 5.50Net realizable value 6.00Net realizable value less normal profit margin 5.20In accordance with IFRS, what is the per-unit carrying value of inventory in themanufacturer's statement of financial position?a) 5.20b) 5.50c) 6.00d) 10.00IFRS requires that inventory be reported at the lower of cost or net realizable value. Netrealizable value is defined by IAS 2 as "the estimated selling price in the ordinary courseof business less the estimated costs of completion and the estimated costs necessary tomake the sale." In this question, NRV is lower than cost, therefore the inventory shouldbe reported at NRV of 6.00.
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