Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 2CCTC
To determine
Concept Introduction:
Valuation of inventory: It is the cost associated with the cost of inventory at the end of the accounting period. It is based on the cost incurred by the entity to acquire the inventory. They are four generally applied
The inventory valuation method used by companies and the alternatives available for the valuation of inventory under IFRS and US GAAP.
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What method does the company use to value its inventory? What other alternativesare available under IFRS? Under U.S. GAAP?
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Chapter 8 Solutions
Intermediate Accounting, 10 Ed
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.5ECh. 8 - Physical quantities and costs included in...Ch. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.23ECh. 8 - Prob. 8.25ECh. 8 - Prob. 8.30ECh. 8 - Prob. 8.31ECh. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Prob. 8.6PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.1DMPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Prob. 8.4DMPCh. 8 - Prob. 8.5DMPCh. 8 - Prob. 8.8DMPCh. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 1CCTCCh. 8 - Prob. 2CCTC
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Similar questions
- How does IFRS differ from U.S. GAAP with respect to using the equity method?arrow_forwardWhat is the potential impact of differences in areas such as inventory valuation of unilever united states inc ?arrow_forwardWhat is the difference between a perpetual inventoryand a physical inventory? If a company maintains a perpetualinventory, should its physical inventory at anydate be equal to the amount indicated by the perpetualinventory records? Why?arrow_forward
- Are there circumstances in which the cost method is required under U.S. GAAP but not under IFRS? Explain.arrow_forwardHow does the inventory method chosen can have a significant effect on the amount of income reported by the company to external parties?arrow_forwardExplain revenue recognition concepts under the US GAAP rulearrow_forward
- How does IFRS differ from current U.S. GAAP with respect to accounting for impairments?arrow_forwardIf circumstances indicate that an inventory write-down is no longer appropriate: a. The write-down can be reversed under U.S. GAAP. b. The write-down can be reversed under IFRS. c. The write-down can be reversed under both U.S. GAAP and IFRS. d. The write-down can’t be reversed under either U.S. GAAP or IFRS.arrow_forwardanswer pleasearrow_forward
- (a) What is the underlying principle in eliminating intercompany inventory transactions? (b) How do intercompany inventory transactions effect NCI (non-controlling interest)? Note the effect for both downstream and upstream sales.arrow_forwardRustic Company has recognized an impairment loss on the value of inventory. If the inventory's value subsequently recovers, under which accounting standards may Rustic revalue the inventory upward and recognize a gain? A) Neither IFRS nor U.S. GAAP allows a recovery in inventory value to be recognized as a gain. B) IFRS allows a recovery in inventory value to be recognized as a gain, but U.S. GAAP does not. c) U.S. GAAP allows a recovery in inventory value to be recognized as a gain, but IFRS does not.arrow_forwardThe New Zealand Equivalent to the IASB Conceptual Framework for Financial Reporting (2018) states that assets can be measured at historical cost or current value. One measure of current value is the amount an asset can expected to be sold for in an active market, i.e. fair value. Fair value may be higher or lower than historical cost. However, the accounting standard for inventory (NZ IAS 2) does not allow inventory, which is an asset, to be valued above the historical cost. It must be measured at the lower of historical cost and fair value. Which accounting principle supports the accounting practice of valuing inventory at the lower of historical cost and fair value? O a. All of the options are correct O b. Historical cost O c. Faithful representation O d. Fair value Oe. Prudence (or conservativism)arrow_forward
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