During 2020, Leni Robredo entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2022. On December 31, 2020 and 2021, the purchase price of this inventory item had fallen to P4.40 and raised to P4.6 per unit. The goods covered by the purchase contract were delivered on January 28, 2022. What is the estimated

During 2020, Leni Robredo entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2022. On December 31, 2020 and 2021, the purchase price of this inventory item had fallen to P4.40 and raised to P4.6 per unit. The goods covered by the purchase contract were delivered on January 28, 2022. What is the estimated

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 5RE: Dani Corporation signed a binding commitment on December 2 to purchase inventory for 300,000 cash on...

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Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
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