For the year ended 31/12/2020, the financial statements of ABC Company were authorized for issue on 31/3/2021. On 31/12/2020, ABC reported inventory in its Balance Sheet at NRV ($7000) since the cost was $10000. On 17/2/2021, ABC entered into an agreement to sell the entire inventory to a customer for $7700 (immaterial) How should IAS 10 account for this event? Select one: a. Disclosure in the notes о b. Accounts receivable Sales revenue C. NO Action O d. Inventory Cost of goods sold e. All answers are false f. Loss on Inventory write-down Inventory O g. Inventory 7700 h. Cost of goods sold Inventory 700 700 Gain on reversal of Inventory write- down 2300 2300 7700 700 2300 700 2300

For the year ended 31/12/2020, the financial statements of ABC Company were authorized for issue on 31/3/2021. On 31/12/2020, ABC reported inventory in its Balance Sheet at NRV ($7000) since the cost was $10000. On 17/2/2021, ABC entered into an agreement to sell the entire inventory to a customer for $7700 (immaterial) How should IAS 10 account for this event? Select one: a. Disclosure in the notes о b. Accounts receivable Sales revenue C. NO Action O d. Inventory Cost of goods sold e. All answers are false f. Loss on Inventory write-down Inventory O g. Inventory 7700 h. Cost of goods sold Inventory 700 700 Gain on reversal of Inventory write- down 2300 2300 7700 700 2300 700 2300

Name: For the year ended 31/12/2020, the financial statementsof ABC Company
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: For the year ended 31/12/2020, the financial statementsof ABC Company were authorized for issue on 31/3/2021.On 31/12/2020, ABC reported inventory in its BalanceSheet at NRV ($7000) since the cost was $10000. On17/2/2021, ABC entered into an agreeme

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The…

A: Inventory, based on its intended use and where it is in the manufacturing or distribution process.…

Q: On December 31, 2020, Jen & Mink Clothing (J&M) performed the inventory count and determined the…

A: Inventory valuation refers to the process of assigning a monetary value to the inventory of a…

Q: Nelson Corporation is required to record an inventory write-down of $2,500 as a result of using the…

A: Financial statements are written records that summaries a company's operations and financial…

Q: At December 31, 2020, Sandhill Company has outstanding noncancelable purchase commitments for 38,000…

A: Unrealized loss = 38000( 3.3 - 2.97) = 12540 This above amount to be debited to profit or loss…

Q: Richardson's Flower Depot uses FIFO for internal reporting purposes and LIFO for financial

A: the steps for converting from FIFO to LIFO will vary depending on the specific business and…

Q: What is the cost of the ending inventory at December 31, 2021 under dollar-value LIFO?

A: if the inventory valuation is as per LIFO basis then the latest stock will sold out first and…

Q: On December 28, 2024. Videotech Corporation (VTC) purchased 15 units of a new satellite uplink…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: The dollar-value LIFO method was adopted by Crane Corp. on January 1, 2020. Its inventory on that…

A: ENDING INVENTORY USING DOLLAR - VALUE LIFO METHOD : = INVENTORY LEVEL / PRICE LEVEL

Q: Sandhill Corporation had the following items in inventory as at December 31, 2023: Unit Item No.…

A: According to IAS-2 “Valuation of inventory”, inventories are valued at lower of cost or net…

Q: In 2022, Maria Corporation changed its method of inventory pricing from LIFO to FIFO. Net income…

A: FIFO is the method for valuation of inventory under which ending inventory is valued on the basis of…

Q: 31, 2022, the records indicated a cost of $70,700 ar ne year.

A: Answer : Direct method : Date Account title Debit Credit Dec.31,2022 Cost of good sold ($70,700…

Q: The management of Knight Company has asked its accounting department to describe the effect upon the…

A: It is the stock held for sale to customers. The inventory comprises of raw materials, work in…

Q: At the beginning of 2021, a company adopts the dollar-value LIFO inventory method for its one…

Q: Naylor, Inc. uses a perpetual inventory system. It records its inventory at lower-of-cost-or-net…

A: Lower of Cost or Net Realizable Value (NRV) Method: This is a method of recording ending inventory…

Q: Meteor Company purchased inventory on March 4, 2024, at a price of $38,000, subject to credit terms…

A: A journal entry is a formal account sale recorded in the general journal of a company's account…

Q: On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The…

A: The inventory valuation is very important, the inventory is generally shown at cost at the balance…

Q: Splish Company signed a long-term noncancelable purchase commitment with a major supplier to…

A: Future probable losses are recognized, as and when these are expected to occur and the related…

Q: Required: Ignoring income tax considerations, prepare the entry to report this accounting change.…

A: LIFO is an inventory valuation method under which inventories which are purchased in last will be…

Q: On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one…

A: The inventory can be valued using various methods as LIFO, FIFO and average method. Using LIFO…

Q: Metlock Company began operations in 2019 and determined its ending inventory at cost and at…

A: ACCOUNTING STANDARDS - 2 Objective of this standard is to formulate the method of computation of…

Q: Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2019.…

A: Dollar value LIFO method: Under this method cost of inventory is covered under layering concept. In…

Q: 2019 2020 1stQ $ 31,000 6,100 4,100 $ 20,800 5,200 2ndQ $ 33,000 7,100 4,300 $ 21,600 5,400 3rdQ $…

Q: On January 1, 2020, Temple Company adopted the dollar-value LIFO method for its one inventory pool.…

A: The question is based on the concept of Financial Accounting.

Q: At the beginning of 2024, a company adopts the dollar-value LIFO inventory method for its one…

A: Inventory includes raw materials, work-in-process and finished goods. An inventory refers to all…

Q: Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the…

A: Net Income :— It is the difference of total revenue and total expenses. FIFO :— It is one of the…

Q: 17. On January 2020, Roel Corp. Has the following inventory purchases. January Units Amount 2 5,750…

A: Date Units Amount January 2 5750 P7500 7 5100 5850 15 7600 6300 25 6600 4950 Total…

Q: djusto Corporation (which is on a December 31 fiscal year-end) engaged in the following transactions…

A: The procedure of entering commercial transactions for the first time in the books of accounts is…

Q: On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The…

A: The ending inventory comprises the cost of units that are not sold yet. Using dollar value LIFO…

Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

For the year ended 31/12/2020, the financial statements
of ABC Company were authorized for issue on 31/3/2021.
On 31/12/2020, ABC reported inventory in its Balance
Sheet at NRV ($7000) since the cost was $10000. On
17/2/2021, ABC entered into an agreement to sell the
entire inventory to a customer for $7700 (immaterial)
How should IAS 10 account for this event?
Select one:
a.
Disclosure in the notes
b.
Accounts receivable
Sales revenue
C.
NO Action
d.
Inventory
Cost of goods sold
e. All answers are false
f.
Loss on Inventory write-down
Inventory
g.
Inventory
7700
h.
Cost of goods sold
Inventory
700
2300
700
Gain on reversal of Inventory write-
down
2300
7700
700
2300
700
2300

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Solution

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

Caterpillar Inc (CAT) has the following excerpts from their financial statements December 31, 2021 December 31, 2020 Inventory (in $ Millions) 14,038 11,402 Net Income(in $ Millions) 6,489 2,998 Inventories are principally determined using the last-in, first-out (LIFO) method. The value of inventories on the LIFO basis. If the FIFO (first-in, first-out) method had been in use, inventories would have been $3,258 million and $2,921 million higher than reported at December 31, 2021 and 2020, respectively. Assume corporate tax rate of 21%. If CAT had used FIFO method instead of LIFO method What inventory (in $ Millions) would CAT report for 2021? What net income (profit) would CAT report in 2021? What is the cumulative amount of income tax savings that CAT generated through end of 2021 by using LIFO instead of FIFO? What…
Bombers Corporation began operations in 2026. Its ending inventory at cost and at LCNRV at the end of 2025 and 2026 is presented below: Cost Net Realizable Value 12/31/26 $926, 000 $ 922,000 12/31/27 910, 000 920, 000 Prepare the journal entries (if any) required at December 31, 2026, and December 31, 2027, assuming that the inventory is recorded at LCNRV and that Schubert uses a perpetual inventory system and the cost of - goods - sold method.
On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $750,000. The 2024 and 2025 ending inventory valued at year-end costs were $793,000 and $882,000, respectively. The appropriate cost indexes are 1.04 for 2024 and 1.05 for 2025. Required: Complete the below table to calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO method. Note: Round "Year end cost index" to 2 decimal places. Round other final answer values to the nearest whole dollars.
On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $660,000. The 2024 and 2025 ending inventory valued at year-end costs were $690,000 and $760,000, respectively. The appropriate cost indexes are 1.04 for 2024 and 1.08 for 2025. Required: Complete the below table to calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO method.
I also need the journal entry for december 31 2025
On January 1, 2020, Crow Company changed from FIFO to LIFO for income tax and external reporting purpos- es. On that same date, the beginning FIFO inventory (the base inventory for LIFO purposes) was $95,000. The following information is available from Crow's records for years 2020 through 2023. Year 2020 2021 2022 2023 Ending Inventory on a FIFO Basis Ending Inventory at Base Year Costs $113,600 84,600 85,200 92,900 a. $125,000 110,000 115,000 130,000 Required Compute the price indices used to calculate ending inventory at base year costs. Round to two decimals. Hint: Divide ending inventory on a FIFO basis by ending inventory at base year for each year. b. Compute the ending inventory on a dollar-value LIFO basis for each year, 2020 through 2023. Prepare the journal entry at each year-end, 2020 through 2023, to adjust inventory to LIFO.
A company adopted dollar - value LIFO on January 1, 2024, when the inventory value was $367,000 and the cost index was 1.35. On December 31, 2024, the inventory was valued at year-end cost of $402,000 and the cost index was 1.40. The company would report a LIFO inventory of: Note: Round your final answer to the nearest whole dollar amount.
Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company’s interim income statements as originally reported under the LIFO method follow: 2019 2020 1stQ 2ndQ 3rdQ 4thQ 1stQ Sales $ 14,000 $ 16,000 $ 18,000 $ 20,000 $ 22,000 Cost of goods sold (LIFO) 4,400 5,400 6,200 7,400 8,900 Operating expenses 2,400 2,600 3,000 3,400 3,600 Income before income taxes $ 7,200 $ 8,000 $ 8,800 $ 9,200 $ 9,500 Income taxes (25%) 1,800 2,000 2,200 2,300 2,375 Net income $ 5,400 $ 6,000 $ 6,600 $ 6,900 $ 7,125 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2019 2020 1stQ 2ndQ 3rdQ 4thQ…
Richardson’s Flower Depot uses FIFO for internal reporting purposes and LIFO for financial and income tax purposes. At the end of 2020, the following information was obtained from the inventory records: 2018 2019 2020 Ending inventory, FIFO $78,650 $82,785 $93,678 Ending inventory, LIFO 68,500 75,640 84,675 Beginning inventory, FIFO 67,535 78,650 82,785 Beginning inventory, LIFO 74,565 68,500 75,640 Required: 1. Prepare the necessary entry to convert to LIFO at the end of 2020. 2. How much would Richardson’s cost of goods sold differ in 2020 if it used FIFO for external reporting?