In: Accounting
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 |