Inventories Question

A kitchen appliance store prepares its financial statements in accordance with IFRS. The store has 500 mixer-grinders in its inventory. Each unit is sold at a price of $150. The store paid on an average of $140 per unit to the manufacturer of the appliance. Sale of appliances has been slow in recent months. The store estimates it can sell each mixer-grinder for $130 if it announces a sale for a limited period along with free shipping at the cost of $5 per mixergrinder. The manufacturer has also lowered the price to $100 because of the low demand. The total carrying amount of the 500 mixer-grinders on the store’s balance sheet would be closest to:

A. $62,500. B. $65,000. C. $70,000.

Now since this is IFRS where we recognize at lower of cost or NRV ,shouldnt the cost be taken as $100?In which case the cost comes to 50,000 while NRV is 62,500 .But the answer took $140 as the cost.Why is this the case?Thanks for helping in advance!

Upon IFRS, Inventories are measured by lower cost or net realizable value.

Cost = 140 x 500 = $70.000

NRV = (130-5) x 500 = $62.500

Therefore, $62.500 seems as correct BV of the Inventories. Check the errata.

Historic cost is 140 (average per unit) so that’s used for existing stock not current cost of 100 as you don’t own stock purchased at that price.