The following information relates to Babcock Bicyle Company's inventory as of December 31, 20x2: Seats and chains $62,000 40,300 36,300 Selling price Cost Replacement cost Sales commission 15" Frames 17" Frames $164,000 136,000 134,000 10% $170,000 143,000 120,000 10% 21" Frames $101,000 70,700 90,700 10% 10% Calculate the value at which Babcock should report their 15" frame bicycles using the lower of cost or net realizable value rule.

Q: ow to do a P&L statement

A: A profit & loss statement shows the organization's revenue, expenses, and its profit for a…

Q: Define carried interest

A: Carried interest: It could be a portion of any profit that private equity and hedge reserves common…

Q: What is full form of GAAP? Describe about it.

A: Generally Accepted Accounting Principles, are commonly known as GAAP

Q: What are the scopes of the IPSASs?

A: Financial Accounting- It is the branch of accounting that records events of financial nature that…

Q: The components of the conceptual framework ?

A:

Q: Why is a source document important? List some examples of source documents.

A: Source documents refers to the documents pertaining to a business transaction. It captures the key…

Q: Use of CAATs?

A: Computer Assisted Audit Techniques or CAATs can be characterized as an auditing strategy that…

Q: Explain pooling of interests

A: Amalgamation is accounted for using any of the two methods based on the criteria met viz, pooling of…

Q: Define the term realization principle.

A: Accounting: Accounting refers to the information system, where the economic activities of a…

Q: Consistency Principal Definition

A: Generally Accepted Accounting Principles (GAAP):These are the guidelines necessary to create…

Q: Define Pooling of interests method

A: The pooling of interest is a technique used for the M&A between two companies. In this method,…

Q: Define the term Net method.

A: As per the net method, the company records the amount of purchase by deducting any potential…

Q: Define classified boards

A: In classified board structure, certain board of directors are classified depending on time length of…

Q: Identify the segment information that is required to be disclosed by GAAP.

A: Segment reporting: Presentation of disclosures along with the financial statements which shows the…

Q: Define charter

A: Introduction: Charters are legalized documents that lawfully set up corporate companies. Only…

Q: Discus the elements of GAAS, how does it relate to GAAP?

A: GAAS(Generally Accepted Auditing Standards) :- provides standards by which the prepared financial…

Q: describe the roles of fi nancial reporting and fi nancial statement analysis;

A: Financial reporting means representing records maintained by an organization in the form of…

Q: Define Classifi ed balance sheet

A: Financial statements are statements which report the profitability and financial position of…

Q: Define Indirect method

A: Hey there ! Since particular concept is not given, indirect method is assumed under cash flow…

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.