Under U.S. GAAP, inventories are reported on the balance sheet at lower−of−cost−or−market. This is an example...

Under U.S. GAAP, inventories are reported on the balance sheet at lower−of−cost−or−market. This is an example of:
A. consistency principle
B. historical cost principle
C. conservatism principle
D. full disclosure principle

Expert Solution

ekkarill92 answered 1 year ago

Describe the inventory valuation rules under U.S. GAAP (lower of cost or market) and under IFRS...

Describe the inventory valuation rules under U.S. GAAP (lower of cost or market) and under IFRS (lower of cost or net realizable value) and discuss appropriate disclosures for inventory write-downs

Under U.S. GAAP, long-lived assets, such as real estate are reported on the balance sheet at...

Under U.S. GAAP, long-lived assets, such as real estate are reported on the balance sheet at the original purchase price of the asset. In the event that the value of a real estate becomes “impaired”—that is, the current market value of the real estate falls below its original purchase price and is unlikely to recover the lost value in the foreseeable future—the asset’s book value is written down to the lower current value and a loss is recorded on the...

1.a.)When using FIFO for inventories, market value generally refers to under U.S. GAAP and ...

1.a.)When using FIFO for inventories, market value generally refers to ________ under U.S. GAAP and ________ under IFRS. A) current replacement cost; historical cost B) historical cost; net realizable value C) historical cost; current replacement cost D) net realizable value; net realizable value b. Margaret Company reported the following information for the current year: Net sales $3,000,000 Purchases $1,957,000 Beginning Inventory $245,000 Ending Inventory $115,000 Cost of Goods Sold 65% of sales Industry Averages available are: Inventory Turnover 5.29 Gross...

How should a Company’s holdings of cryptocurrency be classified on the balance sheet under U.S. GAAP?

Inventories Inventories on the Consolidated Balance Sheets are valued at the lower of cost and net...

Inventories Inventories on the Consolidated Balance Sheets are valued at the lower of cost and net realizable value on a weighted-average cost basis. The Company reduces the carrying value of inventory through a lower of cost and net realizable value adjustment, the impact of which is reflected in cost of sales, exclusive of depreciation and amortization, on the Consolidated Statements of Operations and Comprehensive Income (Loss). The lower of cost and net realizable value adjustment is based on the Company’s...

Explain the lower-of-cost-or-market basis of accounting for inventories.

Example: Caterpillar (CAT), 10-K, 2016 Inventories Inventories are stated at the lower of cost or...

Example: Caterpillar (CAT), 10-K, 2016 Inventories Inventories are stated at the lower of cost or market. Cost is principally determined using the last in, first-out (LIFO) method. The value of inventories on the LIFO basis represented about 60 percent of total inventories at December 31, 2016 and 2015. If the FIFO (first-in, first-out) method had been in use, inventories would have been $2,139 million and $2,498 million higher than reported at December 31, 2016 and 2015, respectively. – Page...

Using the lower of cost or market rule, determine the proper unit value for balance sheet...

Using the lower of cost or market rule, determine the proper unit value for balance sheet reporting purposes for each of the inventory items listed below. Do this by a) calculating the designated market value and b) calculating the lower of cost or market. Item Replacement Cost Ceiling Floor Designated Market Cost Lower of cost or market Books $15.00 $14.00 $12.80 $16 Spoons 17.20 19.20 17.60 16 Plates 12.80 15.20 13.60 16 Candles 9.60 10.40 8.80 16 Lamps 16.80 16.40...

A) .US GAAP is more concerned with inventories’ balance sheet presentation because it instructs users what...

A) .US GAAP is more concerned with inventories’ balance sheet presentation because it instructs users what accounts to use for certain transactions such as inventory write downs B) The IFRS requirement to reverse prior inventory write downs is the IFRS stating that inventory should be reported at market value just like other assets on the balance sheet. The IFRS is more focused on comparability across markets as opposed to US GAAP which is concerned with fraud which might occur with...

How do we calculate goodwill under U.S. GAAP? It is the reported RE on the subsidiary's...

How do we calculate goodwill under U.S. GAAP? It is the reported RE on the subsidiary's balance sheet. It is the sum of all assets and shares of stock used to purchase the subsidiary. It is the difference between the amount paid and the net assets of the subsidiary. None of these are the correct way to calculate the value of goodwill under U.S. GAAP. When can companies capitalize most of their R&D (research and development) costs? When the company...

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