Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

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Answer 1

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Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

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Hurwitz, LLC sells a parcel of waterfront land and a residential condo building with an adjusted tax basis of $100,000 and 50,000, respectively for $500,000. The original purchase price Hurwitz, LLC allocated to the building was $600,000. Hurwitz LLC has deducted $550,000 in depreciation expense. Hurwitz, LLC's realized gain on this transaction is $350,000. If Hurwitz LLC takes back a note as part of the proceeds, what is Hurwitz LLC's gross profit percentage? A. 83.33% B. 71.43% C. 70% D. 50% E. 30%

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Answer 2

Question

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

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Answer 3

Question

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

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Answer 4

Question

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

Answer 6

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

Answer 7

Chapter 8, Problem 3C

1.

To determine

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

Answer 8

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

Answer 9

2.

To determine

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 8 - Prob. 1GI Ch. 8 - Define the upper and lower constraints used in the...Ch. 8 - How may a company apply the lower of cost or a...Ch. 8 - What is the major criticism of the lower of cost...Ch. 8 - Prob. 5GI Ch. 8 - Prob. 6GI Ch. 8 - Prob. 7GI Ch. 8 - Prob. 8GI Ch. 8 - What is the basic assumption underlying the gross...Ch. 8 - Prob. 10GI

Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

Solution Summary: The author explains how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

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Explain how Company B estimates the carrying amount of inventory assigned to its lawnmower at December 31, 2016.

Describe the effect of the FIFO cost flow assumptions on B’s income statement and balance sheet at 2016.

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