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Unformatted text preview: Prior to year-end, Smith Company has a long-term non-cancellable commitment to purchase a certain raw material at a total price of $475,000. At year-end the price for these materials had dropped to $435,000. What journal entry (if any) would the company record at year end? Solution 9-149(M) Dr Unrealized inventory holding loss (income statement 40,000 Cr Estimated liability for inventory purchases 40,000 IFRS QUESTIONS True / False 1. iGAAP permits an entity to reverse inventory write-downs in certain situations, whereas U.S. GAAP does not. 2. iGAAP defines market as replacement cost subject to certain constraints. 3. iGAAP uses a ceiling to determine market. 4. Similar to U.S. GAAP, certain agricultural products and mineral products can be reported at net realizable value using iGAAP. 5. iGAAP records market in the lower-of-cost-or-market differently than U.S. GAAP. Answers to True/False 1. True 2. False 3. False 4. True 5. True...
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- Spring '10
- Marketing, U.S. GAAP, Designated Market