Cost flow assumptions: Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold. First-in, first-out (FIFO): In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases. Last-in, first-out (LIFO): In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases. Weighted average cost method: In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS: The US GAAP and IFRS both requires the inventory to be valued at Accounting treatment of Increase of Decrease in value of inventory under US GAAP: US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value. Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year. Accounting treatment of Increase of Decrease in value of inventory under IFRS: IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value. IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory Requirement 1 To determine: The cost flow assumption that Samsung apply in assigning costs to its inventories.

Question

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Answer 1

Question

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

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Answer 2

Question

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Answer 6

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

Answer 7

Chapter 6, Problem 18E

To determine

Concept Introduction:

Cost flow assumptions:

Cost flow assumptions refers to the methods available for assigning costs to the cost of goods sold and the ending inventory. The different methods that are available for assigning costs to inventories are FIFO, LIFO and weighted average cost of goods sold.

First-in, first-out (FIFO):

In FIFO method of inventory, the cost of goods sold and ending inventory are valued at the older prices. The cost of goods sold are valued at the older prices and the inventory which remains unsold are with the newest prices. This method says that, the inventory first purchased is first sold the ending inventory consists of the latest purchases.

Last-in, first-out (LIFO):

In LIFO method of inventory, the cost of goods sold and ending inventory are valued at the latest or the newest prices. The cost of goods sold are valued at the newest prices and the inventory which remains unsold are valued at the oldest prices. This method says that, the inventory last purchased is first sold and the ending inventory consists of the oldest purchases.

Weighted average cost method:

In weighted average cost method, the cost of goods sold and ending merchandise inventories are valued as price which is derived by dividing total cost of goods available for sale by total units available for sale

Accounting treatment of Increase of Decrease in value of inventory under US GAAP and IFRS:

The US GAAP and IFRS both requires the inventory to be valued at

Accounting treatment of Increase of Decrease in value of inventory under US GAAP:

US GAAP requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. US GAAP requires companies to record their inventory at lower of cost or market value.

Any increase in the value of inventory is not permitted to be recorded under US GAAP even if the company had reduced the value of inventory in the previous year.

Accounting treatment of Increase of Decrease in value of inventory under IFRS:

IFRS requires companies to write down inventory when its value falls below the cost at which is it purchased or recorded. IFRS requires companies to record their inventory at lower of cost or market value.

IFRS allows companies to reverse the reduction in inventory carried in the previous periods, if the value of inventory increases in the current period. But the increase in inventory cannot exceed the original acquisition cost of inventory

Requirement 1

To determine:

The cost flow assumption that Samsung apply in assigning costs to its inventories.

Answer 8

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Answer 9

To determine

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

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Answer 13

Ch. 6 - Prob. 1DQ Ch. 6 - 2. Where is the amount of merchandise inventory...Ch. 6 - Prob. 3DQ Ch. 6 - Prob. 4DQ Ch. 6 - What does the full disclosure principle prescribe...Ch. 6 - Prob. 6DQ Ch. 6 - Prob. 7DQ Ch. 6 - Prob. 8DQ Ch. 6 - Prob. 9DQ Ch. 6 - What is the meaning of market as it is used in...

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Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

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Chapter 6 Solutions

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Requirement 2 To explain: How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.

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Chapter 6 Solutions

Requirement 2

To explain:

How the increase in the value of inventory would be recorded under US GAAP and IFRS for Samsung.