3$4$53. Assume that Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? If required, round your answers to the nearest cent.InventoryCasevalue12$345$ Inventory Write-DownThe following information for Tuell Company is available:Case1245Cost$5.00$5.00$5.00$5.00 $5.00Net realizable value5.105.504.804.304.75Net realizable value less normal profit4.805.404.704.004.60Replacement cost5.305.304.604.154.80Required:1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent.InventoryCasevalue123$44$5$2. Assume Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent.InventoryCasevalue1.2$3$42$3. Assume that Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? If required, round your answers to the nearest cent.

Answered: The following information for Tuell…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

3
$
4
$
5
3. Assume that Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? If required, round your answers to the nearest cent.
Inventory
Case
value
1
2
$
3
4
5
$

Inventory Write-Down
The following information for Tuell Company is available:
Case
1
2
4
5
Cost
$5.00
$5.00
$5.00
$5.00 $5.00
Net realizable value
5.10
5.50
4.80
4.30
4.75
Net realizable value less normal profit
4.80
5.40
4.70
4.00
4.60
Replacement cost
5.30
5.30
4.60
4.15
4.80
Required:
1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent.
Inventory
Case
value
1
2
3
$4
4
$
5
$
2. Assume Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? If required, round your answers to the nearest cent.
Inventory
Case
value
1.
2$
3
$
4
2$
3. Assume that Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? If required, round your answers to the nearest cent.

Expert Solution

Step 1

Under US GAAP, the LIFO technique uses the lower of cost or market, whereas the other methods use the lower of cost or NRV. However, in IFRS, all methods just use lesser of cost or NRV. The distinction between IFRS with GAAP would be that GAAP prohibits writing up, whereas IFRS permits it.

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