Homework Help is Here – Start Your Trial Now!
Business
Accounting
Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. ABC Co. estimated that, after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. Under the lower of cost or net realizable value, what amount should ABC Co. report a chocolate inventory in its December 31, 2020 statement of financial position?       A. P2,800,000       B. P2,600,000       C. P2,500,000       D. P2,400,000       E. answer not given

Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. ABC Co. estimated that, after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. Under the lower of cost or net realizable value, what amount should ABC Co. report a chocolate inventory in its December 31, 2020 statement of financial position?       A. P2,800,000       B. P2,600,000       C. P2,500,000       D. P2,400,000       E. answer not given

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Topic Video
Question
Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. ABC Co. estimated that, after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. Under the lower of cost or net realizable value, what amount should ABC Co. report a chocolate inventory in its December 31, 2020 statement of financial position?
 
 
 
A. P2,800,000
 
 
 
B. P2,600,000
 
 
 
C. P2,500,000
 
 
 
D. P2,400,000
 
 
 
E. answer not given
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Merchandise Inventory
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS