GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 1CCIFRS
To determine
LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.
NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.
To Explain: whether LCM approach used by Company A to value its inventory differ from GAAP (Generally Accepted Accounting Principles).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
12 - CODE AND NAME OF THE ACCOUNT WILL BE DEBT
102 02 X BANK DTH DOLAR XXX120 02 INTERNATIONAL BUYER XXX646 02 IR. CHANGE DIFFERENCE XXXWhich transaction does the journal entry belong to?
A) Collection record of the export in the current periodB) Import fee transfer recordC) Foreign income registrationD) Recording of the return of the export priceE) Registration of collection in the next period of the export
ces
Exercise 5-13 (Algo) Compare the allowance method and the direct write-off method (LO5-6)
At the beginning of 2024, Best Heating & Air (BHA) has a balance of $24,900 in accounts receivable. Because BHA is a privately
owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of
2024, BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that
BHA now will need to use the allowance method. The following transactions occur during 2024 and 2025.
1. During 2024, install air conditioning systems on account, $179,000.
2. During 2024, collect $174,000 from customers on account.
3. At the end of 2024, estimate that uncollectible accounts total 10% of ending accounts receivable.
4. In 2025, customers' accounts totaling $2,100 are written off as uncollectible.
Required:
1. Record each transaction using the allowance method.
2. Record each transaction using…
11:/13
Problem 2-2U S)
William Company operates a customer loyalty program. T
entity grants loyalty points for goods purchased.
The loyalty points can be used by the customers in exchane
for goods of the entity. The pointa have no expiry date.
During 2020, the entity issued 100,000 award credits and
expects that 80% of these award credits shall be redeemed
The total stand-alone selling price of the award credita
granted is reliably measured at P2,000,000.
In 2020, the entity sold goods to customers for a total
consideration of P8,000,000 based on stand-alone selling
price.
The award credits redeemed and the total award credits
expected to be redeemed each year are as follows:
Redeemed
Expected to be redeemed
2020
2021
30,000
15,000
80%
90%
1. What is the revenue from points for 2020?
1,600,000
b.
a.
1.500,000
600,000
d.
480,000
2. What is the revenue from points for 2021?
a.
240,000
b.
200,000
120,000
04.29
Chapter 9 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - It is discovered in 2018 that ending inventory in...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Dollar-value LIFO retail LO95 This exercise is a...Ch. 9 - Change i n inventory costing methods LO96 In...Ch. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Inventory error LO97 In 2018, Winslow...Ch. 9 - Inventory error LO97 Refer to the situation...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or net realizable value LO91 Tatum...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Gross profit method LO92 Royal Gorge Company uses...Ch. 9 - Prob. 9.12ECh. 9 - Retail inventory method; average cost LO93 San...Ch. 9 - Prob. 9.14ECh. 9 - Retail inventory method; LIFO LO93 Crosby Company...Ch. 9 - Prob. 9.16ECh. 9 - Conventional retail method; employee discounts ...Ch. 9 - Retail inventory method; solving for unknowns ...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Prob. 9.20ECh. 9 - Dollar-value LIFO retail LO95 Lance-Hefner...Ch. 9 - Prob. 9.22ECh. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Prob. 9.24ECh. 9 - Error correction; inventory error LO97 During...Ch. 9 - Prob. 9.26ECh. 9 - Inventory error LO97 In 2018, the internal...Ch. 9 - Inventory errors LO97 In 2018, the controller of...Ch. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.30ECh. 9 - Prob. 9.31ECh. 9 - Lower of cost or net realizable value LO91 Decker...Ch. 9 - Prob. 9.2PCh. 9 - Lower of cost or market LO91 Forester Company has...Ch. 9 - Prob. 9.4PCh. 9 - Prob. 9.5PCh. 9 - Prob. 9.6PCh. 9 - Retail inventory method; conventional and LIFO ...Ch. 9 - Prob. 9.8PCh. 9 - Prob. 9.9PCh. 9 - Dollar-value LIFO retail method LO95 [This is a...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Prob. 9.14PCh. 9 - Inventory errors LO97 You have been hired as the...Ch. 9 - Inventory errors LO97 The December 31, 2018,...Ch. 9 - Integrating problem; Chapters 8 and 9; inventory...Ch. 9 - Purchase commitments Appendix In November 2018,...Ch. 9 - Judgment Case 91 Inventoriable costs; lower of...Ch. 9 - Integrating Case 93 FIFO and lower of cost or net...Ch. 9 - Prob. 9.4BYPCh. 9 - Prob. 9.5BYPCh. 9 - Prob. 9.6BYPCh. 9 - Prob. 9.7BYPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9BYPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Ethics Case 911 Overstatement of ending inventory ...Ch. 9 - Analysis Case 912 Purchase commitments Appendix...Ch. 9 - Continuing Cases Target Case LO93, LO94, LO95...Ch. 9 - Prob. 1CCIFRS
Knowledge Booster
Similar questions
- Exercise 8-21 (Algo) Supplemental LIFO disclosures; LIFO reserve; Amerisource Bergen [LO8-6] AmerisourceBergen is an American drug wholesale company. The company uses the LIFO inventory method for external reporting but maintains its internal records using FIFO. The following information was included in a recent annual report: Inventories are comprised of the following ($ in millions): September 30, 2017 $14,328 Inventories (under FIFO) Less: LIFO reserve Inventories (under LIFO) Required 1 The company's income statements reported cost of goods sold of $149,998 million for the year ended September 30, 2017. Required: 1. Prepare the September 30, 2017, adjusting entry to record the cost of goods sold adjustment. 2. If AmerisourceBergen had used FIFO to report its inventories, what would cost of goods sold have been for the quarter ended September 30, 2017? Required 2 (1,665) Complete this question by entering your answers in the tabs below. View transaction list $12,663 Journal entry…arrow_forwardCalculate the VAT on the following exclusive amount R25 500 Calculate the exclusive amount of the following VAT amount R3 500  Q2) An entity had the following transactions during May 2020 Purchases of merchandise R205 000 and equipment R125 000 Sales of Merchandise R425 000 If all amounts are INCLUSIVE of VAT, calculate the amount payable/receivable to/from the South Africa Revenue Services.arrow_forwardRequired information McCarthy, Inc.'s Brazilian subsidiary borrowed 115,000 euros on January 1, 2017. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: US$ per BRL $ 0.28 $ 0.25 $ 0.20 BRL per €. BŘL 4.20 January 1, 2017 Average, 2017 December 31, 2017 BRL 4.30 BRL 4.60 05 a017arrow_forward
- Problem 5-18 (PHILCPA Adapted) P80,000. Recoveries Credit sales Writeoffs 260,000 295,000 300,000 310,000 22,000 37,000 36,000 40,000 2017 11,100,000 12,250,000 14,650,000 15,000,000 2018 2019 2020 The collections from customers during 2020 totaled P14,000,000, excluding recoveries. Doubtful accounts are provided for as a percentage of credit sales. The entity calculated the percentage annually by using the experience of the three years prior to the current year. 1. What amount should be reported as doubtful accounts expense for 2020? a. 310,000 b. 300,000 c. 222,000 d. 378,000 2. What amount should be reported as allowance for doubtful accounts on December 31, 2020? a. 110,000 b. 378,000 c. 300,000 d. 478,000 im 3. What is the net realizable value of accounts receivable on December 31, 2020? a. 2,650,000 b. 2,690,000 c. 2,760,000 d. 2,800,000 158arrow_forwardProblem 20-3 (PHILCPA Adapted) entity provided the following data: Recoveries Credit sales Writeoffs 260,000 295,000 300,000 310,000 22,000 37,000 36,000 40,000 2013 2014 11,100,000 12,250,000 14,650,000 15,000,000 2015 2016 The collections from customers during 2016 totaled P14,000,000 excluding recoveries. Doubtful accounts are provided for as a percentage of credit sales The entity calculated the percentage annually by using the experience of the three years prior to the current year. 1. What amount should be reported as doubtful accounts expense for 2016? a. 310,000 b. 300,000 c. 222,000 d. 378,000 2. What amount should be reported as allowance for doubtful accounts on December 31, 2016? a. 110,000 b. 378,000 c. 300,000 d. 478,000 3. What is the net realizable value of accounts receivable on December 31, 2016? (a. 2,650,000 b. 2,690,000 c. 2,760,000 d. 2,800,000 P2,070,000 and for The On 1, receivablearrow_forwardProblem 2: Old Colonial Corp. (a U.S. company) made a sale to a foreign customer on September 15, 2018, for 100,000 stickles. Payment was received on October 15, 2018. The following exchange rates applied: Date Rate Date Rate Date Rate Sept. 15, 2018 51-5.48 Sept 30, 2018 51-5.50 Oct. 15, 2018 51-5.44 Required: Prepare all journal entries for Old Colonial Corp. in connection with this sale assuming that the company closes its books on September 30 to prepare interim financial statements.arrow_forward
- 85 The following tables show the value (in billims of dollars) of U.S. inkernational trade in goods nd services for the 2004-2006. years |mports Goods Exports Goods Servies Sezvices 34.7 147.1 292.2 2004 807.5 2005 894.6 388.4 IC81.8 315.7 2006 l013.1 422.6 1861.3 342.8 Let 'E be a 312 matrix vepresenting the export data, and let 'm’be a similar matrix for the import data. Find each of the fallowing matries land indicate what information each provides, a) E-Marrow_forwardGanado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.2000/€ to $0.9000/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, E a. What is the amount of translation gain or loss? b. Where should it appear a the financial statements? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.)arrow_forwardHI6026 AUDIT, ASSURANCE AND COMPLIANCE Question 6   Kangaroo Bedding Ltd is a bedding manufacturer that achieved a net profit before income tax of $1 842 000 for the year ended 30 June 2019. Kangaroo Bedding Ltd has a major loan from Westpac Bank (WB) for financing daily and other operations, carrying an interest rate of 7 per cent per annum. Kangaroo Bedding Ltd is required to adhere to financial covenants imposed by WB, and in the event that the covenants are breached, the annual interest rate on loan will increase to 10 per cent. Kangaroo Bedding Ltd has disclosed these details in the notes to the financial report. You are satisfied that the note in the financial report complies fully with the accounting standards; however, you form the view that your audit report should draw attention to this note. In addition, you have identified the following matters from your audit work: Kangaroo Bedding Ltd’s inventory amounted to $1 941 000 on 30 June 2019. In order to move some of its old…arrow_forward
- IFRS 15 Revenue from Contracts with Customers requires strict recognition standards for revenue. Which of the following is correct for recognising revenue? A The sales of $1 million from Alby Co which comes from the repurchase agreement with its customer Bully Co. It is probable that Alby would repurchase the goods from Bully Co. B The sales of $200,000 from Cello Co acting as an agent for Dean Co. D The sales of $10,000 from Elegant Co to the distributer Fusion Co. The Elegant Co remains the ability to direct the use of the asset, and obtains substantially all of the remaining benefits from the asset. Giant Co recognised the revenue of $173,554 for the sale of goods on 1 January 20X7. The amount is due for settlement for the two equal instalments of $100,000 on 1 January 20X8 and 1 January 20X9. The cost of capital of 10%.arrow_forwardWhat amount should be presented as Trade Accounts Receivable in the Statement of Financial Position as of December 31, 2017? A. 699,000 B. 822,000 C. 849,000 D. 894,500arrow_forward18 - What is the journal entry to be made if the policies sent by the exporter are accepted by the importer in the form of payment with acceptance credit?A) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 121 02 RECEIVABLES-FC XX 601 01 FOREIGN GOODS SALES XX B) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 120 02 FOREIGN BUYER XX 601 01 FOREIGN GOODS SALES XX C) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 120 02 FOREIGN BUYER XX 121 02 RECEIVABLES-FC XX D) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 121 02 RECEIVABLES-FC XX 120 02 FOREIGN BUYER XXE) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 102 02 BANK X DTH XX 121 02 RECEIVABLES-FC XXarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning