In the fourth quarter of Year 1, Beech Corporation produced three products (related to different product lines) that it still has in inventory at December 31, the end of its fiscal year. The following table provides information about each product: Product Cost Replacement Cost Selling Price 101 $130 $140 $160 202 $160 $135 $140 303 $100 $90 $70 Beech Corporation expects to incur selling costs equal to 5% of the selling price on each of the products. Required: Determine the amount at which Beech should report its inventory on the December 31, Year 1, balance sheet.
1) In the fourth quarter of Year 1, Beech Corporation produced three products (related to different product lines) that it still has in inventory at December 31, the end of its fiscal year. The following table provides information about each product:
|
Product |
Cost |
Replacement Cost |
Selling Price |
|
101 |
$130 |
$140 |
$160 |
|
202 |
$160 |
$135 |
$140 |
|
303 |
$100 |
$90 |
$70 |
Beech Corporation expects to incur selling costs equal to 5% of the selling price on each of the products.
Required:
Determine the amount at which Beech should report its inventory on the December 31, Year 1,
2) At December 31, Year 2, Beech Corporation still had the same three different products in its inventory. The following table provides updated information for the company’s products:
|
Product |
Cost |
Replacement Cost |
Selling Price |
|
101 |
$130 |
$180 |
$190 |
|
202 |
$160 |
$150 |
$160 |
|
303 |
$100 |
$100 |
$130 |
Beech Corporation still expects to incur selling costs equal to 5% of the selling price.
Required:
a. Determine the amount at which Beech should report its inventory on the December 31, Year 2, balance sheet.
b. How would your answer above differ if Beech used U.S GAAP rather than IFRS?
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