Question

In: Accounting

1. The following inventory information was taken from the records of GlobeKom Ltd: Historical cost $12,000...

1.

The following inventory information was taken from the records of GlobeKom Ltd:

Historical cost $12,000
Replacement cost $9,000
Expected selling price $10,000
Expected selling cost $1,500
Normal profit margin 10% of selling price

Under U.S. GAAP, what should be the impairment loss for inventory (assuming LCM method is used)?

A.

$0

B.

$3,500

C.

$2,000

D.

$1,500

2.

The following inventory information was taken from the records of GlobeKom Ltd:

Historical cost $12,000
Replacement cost $9,000
Expected selling price $10,000
Expected selling cost $1,500
Normal profit margin 10% of selling price

Under IAS 2, what should be the impairment loss for Inventory?

A.

$2,000

B.

$3,500

C.

$1,500

D.

$0

3.

The following inventory information was taken from the records of GlobeKom Ltd:

Historical cost $12,000
Replacement cost $9,000
Expected selling price $10,000
Expected selling cost $1,500
Normal profit margin 10% of selling price

Under IAS 2, what is the net realizable value for inventory?

A.

$9,500

B.

$10,000

C.

$9,000

D.

$8,500

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