Mr luis Rodriguez is the financial manager of HULL pIc , a UK company which is located in the east of London.HUII PLC has following inventory transactions:Day 1 opening 50 units at $15 per unitsDay 2 sold 20 units at $35 per unitDay 3 Purchased 60 units at $17 per unitDay 5 purchased 80 units at $30 per unitDay 5 sold 30 units at $40 per unitYou are required to:Apply the average costing method to each transaction and calculation the closing value of inventoryPrepare the report to critically evaluate the LIFO and FIFO inventory valuation methods and advise which method is better In addition explain which method Hull pLc should use to remain IAS 2 compliantThe financial manager of HULL PLC needs your advice on IAS 38 you are required to explain why it is necessary t distinguish between research and development expenditure and how this distinction affects the accounting treatment.Following the financial managers request you need to explain the criteria that need to be satisfied before expenditure can be recognized in the balance sheet as intangible assets also explain how the criteria is applied to the recognition of separately purchased intangible assets , intangible assets acquired in a business combination and internally generated intangible assets. IN YOUR DISCUSSION YOU ARE REQUIRED TO DISCUSS IAS 38The Hull pLc decides to adopt straight-line depreciation on production equipment the straight-line depreciation is charged in periods of operation but if the production equipment is not in active use then no depreciation is charged The financial managers of Hull plc justify this on the grounds that the economic benefits of the inactive production equipment are not being consumed. Some equipment can remain inactive for many years; although money is spent maintaining them during these periods the financial managers requires advice as to whether this depreciation policy is in accordance with IAS 16 property plant and Equipment.

Name: Mr luis Rodriguez is the financial manager of HULL pIc , a UK company
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Mr luis Rodriguez is the financial manager of HULL pIc , a UK company which is located in the east of London.HUII PLC has following inventory transactions:Day 1 opening 50 units at $15 per unitsDay 2 sold 20 units at $35 per unitDay 3 Purchased 60 u

Answered: Mr luis Rodriguez is the financial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Mr luis Rodriguez is the financial manager of HULL pIc , a UK company which is located in the east of London.

HUII PLC has following inventory transactions:

Day 1 opening 50 units at $15 per units

Day 2 sold 20 units at $35 per unit

Day 3 Purchased 60 units at $17 per unit

Day 5 purchased 80 units at $30 per unit

Day 5 sold 30 units at $40 per unit

You are required to:

Apply the average costing method to each transaction and calculation the closing value of inventory
Prepare the report to critically evaluate the LIFO and FIFO inventory valuation methods and advise which method is better In addition explain which method Hull pLc should use to remain IAS 2 compliant
The financial manager of HULL PLC needs your advice on IAS 38 you are required to explain why it is necessary t distinguish between research and development expenditure and how this distinction affects the accounting treatment.
Following the financial managers request you need to explain the criteria that need to be satisfied before expenditure can be recognized in the balance sheet as intangible assets also explain how the criteria is applied to the recognition of separately purchased intangible assets , intangible assets acquired in a business combination and internally generated intangible assets. IN YOUR DISCUSSION YOU ARE REQUIRED TO DISCUSS IAS 38
The Hull pLc decides to adopt straight-line depreciation on production equipment the straight-line depreciation is charged in periods of operation but if the production equipment is not in active use then no depreciation is charged The financial managers of Hull plc justify this on the grounds that the economic benefits of the inactive production equipment are not being consumed. Some equipment can remain inactive for many years; although money is spent maintaining them during these periods the financial managers requires advice as to whether this depreciation policy is in accordance with IAS 16 property plant and Equipment.

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