Chapter 24, Problem 4CE

To determine

Interim report: When the financial results are published for the year shorter than the fiscal year, this reporting is said to be an interim report. Three financial statements are presented in the interim report, Income statement, Balance sheet and Cash flow statement. These are basically not audited and are prepared on quarterly basis.

To determine whether the company accept the fact that it is not practical to determine the inventory components at interim period. If the company is registered by the SEC commission and uses the gross profit method to calculate cost of goods sold for interim periods.