Exercise 518 accounting for inventory following ifrs

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Cornerstones of Cost Management
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Chapter 6 / Exercise 13
Cornerstones of Cost Management
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Exercise 5­18 Accounting for inventory following IFRS P2 Samsung Electronics reports the following regarding its accounting for inventories. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method, except for materials­in­transit. Inventories are reduced for the estimated losses arising from excess, obsolescence, and the decline in value. This reduction is determined by estimating market value based on future customer demand. The losses on inventory obsolescence are recorded as a part of cost of sales. 1. What cost flow assumption(s) does Samsung apply in assigning costs to its inventories?
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Cornerstones of Cost Management
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Chapter 6 / Exercise 13
Cornerstones of Cost Management
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2. If at year­end 2011 there was an increase in the value of its inventories such that there was areversal of550 (is Korean won) million for the 2010 write­down, how would Samsungaccount for this under IFRS? Would Samsung's accounting be different for this reversal if itreported under U.S. GAAP? Explain.PROBLEM SET A (3) Ending Inventory: FIFO, $14,800; LIFO, $13,680, WA, $14,352 (4) LIFO gross profit, $17,980 Required 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using ( a ) FIFO, ( b ) LIFO, ( c ) weighted average, and ( d ) specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for each of the four costing methods in part 3. Problem 5­2A A Periodic: Alternative cost flows P1 Refer to the information in Problem 5­1A and assume the periodic inventory system is used. Required 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using ( a ) FIFO, ( b ) LIFO, ( c ) weighted average, and ( d ) specific identification. (Round all amounts to cents.)
9/17/2015 IEB Wireframe 33/48 4. Compute gross profit earned by the company for each of the four costing methods in part 3. Problem 5­3A Perpetual: Alternative cost flows P1 Information: Montoure Company uses a perpetual inventory system. It entered into the following calendar­year 2013 purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.) Page 245 Required 1. Compute cost of goods available for sale and the number of units available for sale.

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