Which of the following is a justification for valuing inventory above historical cost? Inability to determine...
Which of the following is a justification for valuing inventory above historical cost?
Inability to determine appropriate prices
Interchangeability of the units of inventory
All of the items listed are justifications for valuing inventory above historical cost
Immediate marketability of the inventory at a quoted market price
Homework Answers
Answer : All of the items listed are justifications for valuing inventory above historical cost.
Explanation: As per Chapter 4 of ARB No - 43 (Inventory Pricing), cases where inventory can be value above historical cost are as follows :-
- When inventory has feature of interchangeability of the units.
- When there is inability to determine appropriate costs or prices (for eg. in case of by -products).
- When an immediate marketability of the inventory at a quoted market price is present (for eg. in case farm commodities)
Add Answer to:
Which of the following is a justification for valuing inventory
above historical cost?
Inability to determine...
QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement...
QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement cost. b. selling price. C. historical cost plus 10%. d. selling price less markup.
Valuing Inventory at Lower-of-Cost-or-Market Gard Inc. has compiled the following information related to its five products....
Valuing Inventory at Lower-of-Cost-or-Market Gard Inc. has compiled the following information related to its five products. Costs of disposal are estimated to be 10% of selling price, and gross profit is estimated to be 25% of the selling price. Determine the value of inventory applying the lower-of-cost-or- market rule to each individual inventory item. Note: Round each amount to the nearest dollar. #1 #2 #3 #4 #5 Estimated selling price $330 $380 $410 $500 $650 Original cost (LIFO) 225 240...
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results...
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results in the following : All of the above An assumption that more recently acquired inventory is used for current production - leading to higher COGS and lower accounting profits Leads to a Balance Sheet that understates the market value of the inventory that remains Leads to a lower amount of corporate income tax being paid
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the...
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule. (Round answers to 2 decimal places, e.g. 52.75.) Cases 1 2 3 4 5 Cost $14.50 $14.80 $15.30 $15.40 $16.30 Net realizable value 15.70 20.20 14.00 8.90 14.50 Net realizable value less normal profit 14.10 18.70 12.56 7.40 12.70 Market (replacement cost) 16.30 19.00 13.00 10.10 16.10 Cases 1 2 3 4...
5. Information about an item of inventory as of 12/31/2011 is given below. Historical cost SSO...
5. Information about an item of inventory as of 12/31/2011 is given below. Historical cost SSO Selling price 63 Selling costs 5 Replacement cost 45 Normal profit margin 17 a. What is the lower-of-cost-or-market value for the inventory item on 12/31/2011? b. In addition to the above, the following information was available: On 1/1/2011 Inventory (at cost) $154,000 Inventory (at marketi $147,000 Assume that the company has 3.500 units of inventory on 12/31/2011. The company uses loss method to record...
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the...
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule. (Round answers to 2 decimal places, e.g. 52.75.) Cases 3 Cost Net realizable value Net realizable value less normal profit Market (replacement cost) 1 $13.60 15.60 13.70 13.90 2 $14.40 19.50 18.00 19.00 $14.50 13.30 11.96 12.40 4 $16.90 11.70 9.90 10.20 5 $15.60 15.90 14.20 17.30 Cases Unit inventory price
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the...
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule. (Round answers to 2 decimal places, e.g. 52.75.) Cases 1 2 33 5 $13.60 $14.40 $14.50 $16.90 $15.60 Cost Net realizable value 19.50 13.30 11.70 15.60 15.90 Net realizable value less normal profit 13.70 18.00 11.96 9.90 14.20 Market (replacement cost) 13.90 19.00 12.40 10.20 17.30 Cases 1 2 3 4 5...
Which of the following methods for valuing inventory would most likely be used for high value...
Which of the following methods for valuing inventory would most likely be used for high value items such as cars and houses? Select one: a. LIFO b. FIFO c. Weighted Average d. Specific Identification Next
Metlock Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is...
Metlock Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2020. Item Quantity 1,600 1,300 1,500 1,500 1,900 Unit Cost $8.33 9.10 6.22 4.22 7.10 Replacement Cost/Unit $9.32 8.77 5.99 4.66 6.99 Estimated Selling Price/Unit $11.66 10.43 7.99 6.99 7.44 Completion & Disposal Cost/Unit $1.67 1.00 1.28 Normal Profit Margin/Unit $2.00 1.33 0.67 1.67 1.11 0.89 0.78 Greg Forda is an accounting clerk in...
Ivanhoe Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is...
Ivanhoe Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company’s inventory records as of December 31, 2017. Item Quantity Unit Cost Replacement Cost/Unit Estimated Selling Price/Unit Completion & Disposal Cost/Unit Normal Profit Margin/Unit A 1,900 $9.23 $10.33 $12.92 $1.85 $2.21 B 1,600 10.09 9.72 11.56 1.11 1.48 C 1,800 6.89 6.64 8.86 1.41 0.74 D 1,800 4.67 5.17 7.75 0.98 1.85 E 2,200 7.87 7.75 8.24 0.86 1.23 Greg Forda...
QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement cost. b. selling price. C. historical cost plus 10%. d. selling price less markup.
Valuing Inventory at Lower-of-Cost-or-Market Gard Inc. has compiled the following information related to its five products. Costs of disposal are estimated to be 10% of selling price, and gross profit is estimated to be 25% of the selling price. Determine the value of inventory applying the lower-of-cost-or- market rule to each individual inventory item. Note: Round each amount to the nearest dollar. #1 #2 #3 #4 #5 Estimated selling price $330 $380 $410 $500 $650 Original cost (LIFO) 225 240...
5. Information about an item of inventory as of 12/31/2011 is given below. Historical cost SSO Selling price 63 Selling costs 5 Replacement cost 45 Normal profit margin 17 a. What is the lower-of-cost-or-market value for the inventory item on 12/31/2011? b. In addition to the above, the following information was available: On 1/1/2011 Inventory (at cost) $154,000 Inventory (at marketi $147,000 Assume that the company has 3.500 units of inventory on 12/31/2011. The company uses loss method to record...
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule. (Round answers to 2 decimal places, e.g. 52.75.) Cases 3 Cost Net realizable value Net realizable value less normal profit Market (replacement cost) 1 $13.60 15.60 13.70 13.90 2 $14.40 19.50 18.00 19.00 $14.50 13.30 11.96 12.40 4 $16.90 11.70 9.90 10.20 5 $15.60 15.90 14.20 17.30 Cases Unit inventory price
In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases, under the lower-of-cost-or-market rule. (Round answers to 2 decimal places, e.g. 52.75.) Cases 1 2 33 5 $13.60 $14.40 $14.50 $16.90 $15.60 Cost Net realizable value 19.50 13.30 11.70 15.60 15.90 Net realizable value less normal profit 13.70 18.00 11.96 9.90 14.20 Market (replacement cost) 13.90 19.00 12.40 10.20 17.30 Cases 1 2 3 4 5...
Which of the following methods for valuing inventory would most likely be used for high value items such as cars and houses? Select one: a. LIFO b. FIFO c. Weighted Average d. Specific Identification Next
Metlock Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2020. Item Quantity 1,600 1,300 1,500 1,500 1,900 Unit Cost $8.33 9.10 6.22 4.22 7.10 Replacement Cost/Unit $9.32 8.77 5.99 4.66 6.99 Estimated Selling Price/Unit $11.66 10.43 7.99 6.99 7.44 Completion & Disposal Cost/Unit $1.67 1.00 1.28 Normal Profit Margin/Unit $2.00 1.33 0.67 1.67 1.11 0.89 0.78 Greg Forda is an accounting clerk in...
Most questions answered within 3 hours.
-
3. Which statement about nuclear fission is correct? (1
point)
A. Nuclear fission provides energy for...
asked 3 minutes ago -
If a $2,000 increase in income leads to a $1,5000 increase in
consumption expenditures, then the...
asked 3 minutes ago -
May you please put this in layman's terms?
ABSTRACT
Coagulase-negative staphylococci (CoNS) and Staphylococcus
aureus are...
asked 7 minutes ago -
If authentic leadership is really a lifelong process,
can teenagers be authentic leaders? Why or why...
asked 23 minutes ago -
Six years of quarterly data of a seasonally adjusted series are
used to estimate a linear...
asked 42 minutes ago -
Which of the following is not an ecological model used
to foster behavior change?
PRECEDE-PROCEED Model...
asked 45 minutes ago -
On the Apollo 14 mission to the moon, astronaut Alan Shepard hit
a golf ball with...
asked 41 minutes ago -
What are John’s potential claims if he is terminated
this week?
John is a 54-year-old man...
asked 55 minutes ago -
A (8.5) cm tall object is placed at a distance of (14.2) cm from
a convex...
asked 1 hour ago -
(2) For the following questions, consider a data set that
exhibits a normal distribution. Report the...
asked 1 hour ago -
What exactly is an information system? How does it work" What
are its people organization,
...
asked 1 hour ago -
The Food Marketing Institute shows that 17% of households spend
more than $100 per week on...
asked 1 hour ago