LIFO reserves: White Rose Company Reported year for analysis, 2013 $ 45,200,000 2013 Net income as reported 2013 Inventory reserve 2012 Inventory reserve 2013 income taxes 2013 Income before income taxes 20,000,000 28,000,000 14,000,000 59,200,000

Q: In the financial accounting for inventory, what is a cost flow assumption?

A: Accounting for inventories is a subset of accounting that deals with the value of inventoried assets…

Q: FIFO or LIFO

A: Inventory is the current assets reported under the head current assets in the balance sheet of the…

Q: Under which inventory cost flow assumption is the oldest cost of inventory items likely to remain on…

A: Correct option is LIFO

Q: Describe diff erent inventory valuation methods (cost formulas).

A: The manner in which an organization calculates the product costs (inventory value assessment)…

Q: Should inventory be measured initially at its market value or at cost?

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic…

Q: Describe implications of valuing inventory at net realizable value for financial statementsand…

A: Net realizable value means the value at which the inventory can be sold in the market reduced by the…

Q: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: Define inventory shrinkage.

A:

Q: How do you report a gain if a portion of the inventory has been sold?

A: Inventory when purchased is recorded in the financial statements {Part of Cost of Goods sold}…

Q: Briefly explain the usefulness of the inventory figure resulting from the application of lower of…

A: Net Realizable Value(NRV) refers to the inventory value which a business entity can realize from…

Q: HOW DO YOU GET THE REMAING TOTAL BALANCE OF INVENTORY COST?

A: The question deals with inventory valuation at LIFO method.  LIFO means Last in First out.  In this…

Q: Which of the following inventory cost flow assumptions produces the same ending inventory values…

A: Periodic Inventory System : In periodic inventory system ending balance of inventory will be updated…

Q: Required information [The following information applies to the questions displayed below.] A company…

A: Evaluating Net Realizable Value is essential for proper financial reporting because it prevents…

Q: net income

A: Net income is stated in the income statement of the company that is calculated by deducting the…

Q: Inventory should be measured at lower of fair value and net realizable value of the inventory.

A: The IAS 2 suggests the requirement for the reporting of the inventories. This states that the…

Q: An example of a frequency distribution was a:    A.inventory analysis B.accounts receivable aging…

A: Frequency distribution analysis:- A frequency distribution is a representation, either in a…

Q: How do you use FIFO and LIFO to calculate the cost of inventory?

A: Lets understand the meaning of LIFO and FIFO method. In First In First Out (FIFO) method company…

Q: following is accounted for prospectively? Change in reporting entity. Change in…

A: A change in an estimate is accounted for prospectively.

Q: Define Inventory turnover ratio.

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: The original cost of an item of inventory is above its replacement cost. The item s replacement cost…

A: Under the lower of cost or market (LCM) method, inventory is valued at the lower of its original…

Q: How is the net cost of inventory calculated?

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: How do you calculate desired ending inventory and estimated beginning inventory?

A: Ending/Closed inventory is the total value of products that are completed or work in progress…

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.