Identify the correct statement from the following if, cost of inventory is greater than its net releasable value? The firm will not incur losses due to this situation. There is higher demand for the inventory in the market. Inventory value in the balance sheet shall decrease. Inventory value in the balance sheet shall increase.
Q: AD, Inc. uses the LIFO-lower of cost or market method to value inventory. If the inventory value is…
A: For financial reporting purposes, will value the inventory in accounting at lower prices or on the…
Q: Under the LIFO cost flow assumption during a period ofinflation, which of the following is false? A.…
A: Inflation and cost of goods sold - a company selling goods during periods of inflation will see an…
Q: Current Attempt in Progress If a company overstates its closing inventory, it will O understate…
A: When closing inventory is overstated, this reduces the amount of inventory that would otherwise have…
Q: A company records inventory at gross invoice price. Theoretically, how should the following affect…
A: Solution: Interest on inventory loan do not affect cost of inventory, it is working capital loan…
Q: Which of the following statements is correct? Group of answer choices A)The choice of an inventory…
A: SOLUTION AVERAGE COST METHOD IS USED TO CALCULATE THE COST OF INVENTORY AT THE END AND ALSO THE COST…
Q: The inventory valuation method that has the advantages of assigning an amount to inventory on the…
A: Inventory means the stock of goods in hand . Goods means the thing in which the business deals and…
Q: In what ways would a reduction in inventory help the company
A: Inventory refers to all the items, goods, merchandise, and materials held by a business for selling…
Q: Which inventory cost flow assumption generally results in the lowest reported amount for cost of…
A: The answer will be FIFO, First-in, first-out i.e. option B.
Q: Identify that if prices are rising, which inventory cost flow method will produce the highest amount…
A: solution Identify that if prices are rising, which inventory cost flow method will produce the…
Q: Explain whether the following situations, taken independently, would be favorable or unfavorable: (…
A: Favorable is the condition that is positive for a business. This implies that the variance or the…
Q: Which of the following is not a disadvantage of the LIFO inventory cost flow assumption? a. The…
A: LIFO is the Last in first out method of inventory which says that inventory purchased last should be…
Q: The net realizable value of Lake Corporation’s inventory has declined below its cost. Allyn Conan,…
A: a. The ethical issue involved in the situation is, use of cost-of-goods-sold method to write down…
Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…
A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…
Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…
A: Market value is the price of an item/product prevailing in the market on the given date.
Q: Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule…
A: The rule of valuing the inventory at cost or net realizable value is also called as Prudence concept…
Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…
A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…
Q: Application of the lower-of-cost-or-market rule results in inconsistency because a company may value…
A: Lower of Cost or market rule states that while estimating value of the company's Inventory it is…
Q: An increasing inventory turnover ratio indicates that: a.a company has reduced the time it takes to…
A: The inventory turnover ratio indicates the efficiency of a business to purchase and selling its…
Q: Assuming that the price the company pays for inventory is increasing, which method will:
A: The appropriate answer is shown below
Q: Which of the following statements is incorrect? Select one: a. By using the IFRS, goods shipped on…
A: Option C is correct.
Q: What do you think will happen to the financial performance of the company if at the end of the…
A: Having a lot of inventory in your warehouses usually signifies that your firm is struggling to…
Q: Explain the purpose of the inventory turnover ratio? Is it possible for a firm to have a high…
A: In finance we make use of various financial ratios to determine the financial health of a company.…
Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…
A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…
Q: Which statements below are true? 1. LCM and LCNRV may be applied by individual products, by…
A:
Q: During times of deflation , LIFO will provide the highest closing inventory figure and the highest…
A: A drop in the overall price level of products and services is referred to as deflation. When the…
Q: Which of the following statement is not valid as it applies to inventory costing method? A) If…
A: The correct answer is Option (d)
Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…
A: Step 1 Last in, first-out (LIFO) is inventory method in which the costs of the most recent…
Q: During a period when inventory costs are steadily increasing, which of the following is true? O a.…
A: FIFO considers the cost of initial purchases as the cost of goods sold and the later purchases as…
Q: he management of Milque Corp. is considering the effects of various inventory-costing methods on its…
A: Introduction:- The following four inventory valuation methods used as follows under:- First-In,…
Q: If the book inventory is larger than the physical inventory, the difference is known as Reduction…
A: A reduction occurs when a thing is made smaller or less in size or amount. An overage occurs when…
Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?
A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…
Q: Typically, the impact of the LIFO reserve is to decrease cost of goods sold and decrease ending…
A: LIFO method last in first out so LIFO method take last cost of product into account so do not older…
Q: What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value…
A:
Q: net realisable value of inventory would ______ cost.
A: Net Realizable value is the value received upon selling the asset less estimated cost to sell the…
Q: Allowance Method in accounting for inventory write-down
A: Statement I is correct because Allowance method is required to be followed in accounting for…
Q: Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The…
A: Option c is correct.
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- Effects of Inventory Costing Methods Refer to your answers for Filimonov Inc. in Cornerstone Exercises 6-22 through 6-24. Required: 1. In a period of rising prices, which inventory costing method produces the highest amount for ending inventory? 2. In a period of rising prices, which inventory costing method produces the highest net income? 3. In a period of rising prices, which inventory costing method produces the lowest payment for income taxes? 4. In a period of rising prices, which inventory method generally produces the most realistic amount for cost of goods sold? For inventory? Would your answer change if inventory prices were decreasing during the period?Which one of the following inventories may not be valued for balance sheet purposes at the inventory's selling price less distribution costs even if it is above the cost of the inventory? a. grain for an agricultural company b. crude oil for an oil company c. gold for a minnung corporation d. laptops for a computer manaufacturerWard Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements 1. Which inventory costing method would best meet Ward's goal? 2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need? Requirement 1. The inventory costing method that averages cost changes is the: O A. Last-in, first-out (LIFO) cost method O B. Weighted-average method OC. First-in, first-out (FIFO) cost method O D. Specific identification method Requirement 2. The inventory costing method that expenses out the newer purchases of goods is the: O A. Last-in, first-out (LIFO) cost method B. Weighted-average method Oc. Specific identification method O D. First-in, first-out (FIFO) cost method
- QUESTION 1 A significant amount of accounting information is dedicated to planning and contraling the use of different categories of inventory and their attributable costs. Discuss, with examples, the five categories of costs that are associated with merchandise for resale and materials used for production. QUESTION 2 Cost-volume-profit (CVP) analysis is used to seek answers to questions such as: "What will happen to the profit it the firm increases its selling price by 15%?" Discuss the following under CVP analysis (present graphical representations where applicable): 1 The break-even graph il. The contribution graph i. The profit graphExercise 6-14 (Algo) Calculate inventory using lower of cost and net realizable value (LO6-6) [The following information applies to the questions displayed below.] A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equipment. As technology advances the design and performance of the next generation of drivers, the older models become less marketable and therefore decline in value. Suppose that in the current year, Ping (a manufacturer of golf clubs) introduces the MegaDriver II, the new and improved version of the MegaDriver. Below are year-end amounts related to Golf USA’s inventory. Inventory Quantity Unit Cost Unit NRV Shirts 38 $55 $73 MegaDriver 18 390 330 MegaDriver II 33 410 450 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Exercise 9-7 (Algo) Effects of inventory error LO 2 If the ending inventory of a firm is overstated by $49,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) Operating income by overstated understated
- Required information Exercise 6-14 (Algo) Calculate inventory using lower of cost and net realizable value (LO6-6) [The following information applies to the questions displayed below.] A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equipment. As technology advances the design and performance of the next generation of drivers, the older models become less marketable and therefore decline in value. Suppose that in the current year, Ping (a manufacturer of golf clubs) introduces the MegaDriver II, the new and improved version of the MegaDriver. Below are year-end amounts related to Golf USA's inventory. Inventory Shirts MegaDriver MegaDriver II Exercise 6-14 (Algo) Part 4 Quantity 37 17 Revenues 4. Determine the impact of the adjusting entry in the financial statements. (Amounts to be deducted should be entered with minus sign.) Advertising Expense Assets Unit Cost $60 380 400 Unit NRV $72 310 440 Income…ning Objective 2 S6-2 Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements 1. Which inventory costing method would best meet Ward's goal? 2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?Question: Given the historical cost of the product, Dominoe is $65, the selling price of product Dominoe is $90, costs to sell product Dominoe are $16, the replacement cost for product Dominoe is $60, and the normal profit margin is 20% of sales price, what is the amount that should be used to value the inventory under the lower-of-cost-or-market method? a. $65. b. $56. c. $60. d. $74.
- If annually your company spends significantly more on inventory holding costs than order costs, it is likely that you are: 1. Ordering in quantities that are too large II. Carrying too much inventory I only O II only Both I and II Neither I nor IIThe management of Milque Corp. is considering the effects of inventory-costing methods on its financial statements and its income tax expense. Assuming that the cost the company pays for inventory is increasing, which method will: (a) (b) (c) Provide the highest net income? Provide the highest ending inventory? Result in the lowest income tax expense? 10Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule is true? a.The LCNRV rule is an application of the cost principle. b.When the net realizable value of inventory drops below the cost of inventory, an adjustment is made to decrease inventory to its net realizable value and decrease income. c.If a company uses the LCNRV rule, there is no need to use a cost flow assumption such as FIFO, or weighted average cost. d.When the net realizable value of inventory is above the cost of inventory, an adjustment is made to increase inventory to its net realizable value and increase income.