Harvest Lane Foods measures inventories at the lower of cost and net realizable value, applied item by item (IAS 2), and records write-downs directly against Inventory with the loss in Cost of Goods Sold. At December 31, 2025 its inventory was:
| Item | Cost | NRV at Dec 31, 2025 |
|---|
| Flour | $12,000 | $11,200 |
| Sugar | 9,000 | 9,400 |
| Cooking Oil | 15,000 | 13,700 |
| Spices | 6,000 | 6,300 |
By March 31, 2026 none of the written-down goods had been sold, and market prices had recovered: the NRV of the flour was $12,200 and the NRV of the cooking oil was $14,500. Other items remained above cost.
Required:
- Record the write-down to net realizable value at December 31, 2025 (one entry for the total).
- Record the reversal of the write-down at March 31, 2026 (one entry for the total). Remember that a reversal is limited to the amount of the original write-down, so inventory is never carried above its original cost.