The Net Carrying Value of Lan Co.'s Inventory

Explanation:

Closing inventory as assessed: Lan Co. determined its inventory to be $258,000 based on the LIFO basis.

Replacement cost of this closing inventory: The current replacement cost of the inventory was $230,000.

Selling Price of this inventory: Lan estimates that it could sell the inventory for $275,000.

Disposal Cost: The disposal cost is $14,000.

Net sales revenue from this inventory = $275,000 - $14,000 = $261,000

Less: Regular operating margin = $10,000

Value as per sales = $261,000 - $10,000 = $251,000

Closing inventory as per IFRS is to be valued at cost or Net Realizable Value, or Replacement Value whichever is less. Here, the least value is $230,000 which is the replacement value.

Final Answer: Value of closing inventory = $230,000

The net carrying value of Lan Co.'s inventory is $251,000.