Session 11 - Projection

Session 11 - Projection - AC 611 Financial Accounting...

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Fall 2010 Professor Keating Session #11 AC 611: Financial Accounting Problems I
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© Elizabeth K. Keating, 2010 Session #11 Lower of Cost or Market Pg. 2 AC 611: Financial Accounting Problems I
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© Elizabeth K. Keating, 2010 Session #11 Pg. 3 Produce Example AC 611: Financial Accounting Problems I
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© Elizabeth K. Keating, 2010 Session #11 Pg. 4 Recording Market Value AC 611: Financial Accounting Problems I Both methods are GAAP. Allowance method is preferable Shows decline in market value separate from COGS in I/S Allowance should be reduced as goods sold Often, firms record gains when valuation allowance is too high
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© Elizabeth K. Keating, 2010 Session #11 Pg. 5 Valuation Bases Net Realizable Value (even if cost is lower) is allowed if both: Controlled market with prices applicable to all quantities No significant disposal costs Example: (Rare metals, meat) Relative Sales Value AC 611: Financial Accounting Problems I
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© Elizabeth K. Keating, 2010 Session #11
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This note was uploaded on 03/02/2011 for the course AC 611 taught by Professor Keating during the Spring '11 term at Bentley.

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Session 11 - Projection - AC 611 Financial Accounting...

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