INTERMEDIATE ACCOUNTING(LL-W/WILEY+)
17th Edition
ISBN: 9781119598589
Author: Kieso
Publisher: WILEY
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Question
Chapter 8, Problem 8CA
To determine
Introduction:
Inventory includes raw materials, work-in-process goods and finished products, which are held with the purpose of sale.
Given:
G Corporation is a medium-sized manufacturing company with two divisions and three subsidiaries, all located in the United States. The Metallic Division manufactures metal castings for the automotive industry, and the Plastic Division produces small plastic items for electrical products and other uses. The three subsidiaries manufacture various products for other industrial users. G Corporation plans to change from the lower of first-in first-out (FIFO)- cost or market method of
(a)
To describe:
The establishment of and subsequent pricing procedures for each of the following LIFO inventory methods.
(1) LIFO applied to units of product when the periodic inventory system is used.
(2) Application of the dollar-value method to LIFO units of product.
To determine
(b)
To distinguish:
Discuss the specific advantages and disadvantages of using the dollar-value LIFO application as compared to specific goods LIFO (unit LIFO). (Ignore income tax considerations.)
To determine
(c)
To discuss:
The general advantages and disadvantages claimed for LIFO methods.
Expert Solution & Answer
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Students have asked these similar questions
Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and
Table 2.)
Date Placed in
Asset
Machinery
Service
October 25
Original
Basis
$ 120,000
Computer equipment
February 3
47,500
Used delivery truck*
August 17
Furniture
April 22
60,500
212,500
The delivery truck is not a luxury automobile.
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
b. What is the allowable depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation
and elects out of §179 expense?
Lina purchased a new car for use in her business during 2024. The auto was the only business asset she purchased
during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including
§179 expense unless stated otherwise) for the automobile in 2024 and 2025 (Lina doesn't want to take bonus
depreciation for 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1,
Table 2, and Exhibit 10-10.)
a. The vehicle cost $40,000, and business use is 100 percent (ignore §179 expense).
Year
Depreciation
deduction
2024
2025
Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and
Table 2.)
Date Placed in
Asset
Machinery
Service
October 25
Original
Basis
$ 120,000
Computer equipment
February 3
47,500
Used delivery truck*
August 17
Furniture
April 22
60,500
212,500
The delivery truck is not a luxury automobile.
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
a. What is the allowable depreciation on Evergreen's property in the current year, assuming Evergreen does not elect §179 expense
and elects out of bonus depreciation?
Chapter 8 Solutions
INTERMEDIATE ACCOUNTING(LL-W/WILEY+)
Ch. 8 - Prob. 1QCh. 8 - 2. Why should inventories be included in (a) a...Ch. 8 - 3. What is the difference between a perpetual...Ch. 8 - Prob. 4QCh. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Prob. 16QCh. 8 - Prob. 17QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - BE8-1 (L01) Included in the December 31 trial...Ch. 8 - Prob. 2BECh. 8 - Prob. 3BECh. 8 - Prob. 4BECh. 8 - Prob. 5BECh. 8 - Prob. 6BECh. 8 - Prob. 1ECh. 8 - Prob. 6ECh. 8 - Prob. 9ECh. 8 - E8-10 (L03) (FIFO and LIFO—Periodic and Perpetual)...Ch. 8 - E8-11 (L03) (FIFO, LIFO and Average-Cost...Ch. 8 - Prob. 12ECh. 8 - E8-13 (L03) (Compute FIFO, LIFO,...Ch. 8 - E8-14 (L03) (FIFO and LIFO—Periodic and Perpetual)...Ch. 8 - Prob. 15ECh. 8 - E8-18 (L04) (LIFO Effect) The following example...Ch. 8 - Prob. 24ECh. 8 - Prob. 1CACh. 8 - Prob. 2CACh. 8 -
CA8-3 (Inventoriable Goods and Costs) George...Ch. 8 - Prob. 4CACh. 8 - CA8-5 (General Inventory Issues) In January 2017,...Ch. 8 - Prob. 6CACh. 8 - CA8-7 (Average-Cost, FIFO, and LIFO) Prepare a...Ch. 8 - Prob. 8CACh. 8 - Prob. 9CACh. 8 - Prob. 11CACh. 8 - Prob. 1UJCh. 8 - Prob. 2UJCh. 8 - CE8-1 Access the glossary (“Master Glossary”) to...Ch. 8 - Prob. 2CECh. 8 - Prob. 3CECh. 8 - CE8-4 What is the nature of the SEC guidance...Ch. 8 - Prob. 1CRC
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