Calculate the lower of cost or market

Assignment Help Accounting Basics
Reference no: EM131117678

1. Lower-of-Cost-or-Market Fiedler Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2010.Greg Forda is an accounting clerk in the accounting department of Fiedler Co., and he cannot understand why the market value keeps changing from replacement cost to net realizable value to something that he cannot even figure out. Greg is very confused, and he is the one who records inventory purchases and calculates ending inventory. You are the manager of the department and an accountant.

(a) Calculate the lower-of-cost-or-market using the "individual item" approach.

(b) Show the journal entry he will need to make in order to write down the ending inventory from cost to market.

(c) Then write a memo to Greg explaining what designated market value is as well as how it is computed. Use your calculations to aid in your explanation.

152_11-B-A-V-I (149).PNG

Reference no: EM131117678

Questions Cloud

Compute the present value of an annuity : Compute the present value of an annuity of $ 875 per year for 22 years, given a discount rate of 8 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1).(Round your answer to 2 decimal places; record..
When would a u.s. firm consider purchasing a call option : When would a U.S. firm consider purchasing a call option on euros for hedging? When would a U.S. firm consider purchasing a put option on euros for hedging?
Question regarding the financial projection : Give some background information on New York Times? Discuss briefly performance data 2015 of New York times. Discuss briefly the financial projection 2015 of New York Times.
A company profit-sharing plan : Of 500 employees, 200 participate in a company's profit-sharing plan (P), 400 have major-medical insurance coverage (M), and 200 employees participate in both programs. Construct a Venn diagram to portray the events designated P and M.
Calculate the lower of cost or market : Then write a memo to Greg explaining what designated market value is as well as how it is computed. Use your calculations to aid in your explanation.
What does management expect its stock price to be one year : Blue Dog Manufacturing Corp. just reported a net income of $11,000,000, and its current stock price is $23.00 per share. Blue Dog is forecasting an increase of 25% for its net income next year, but it also expects it will have to issue 2,100,000 new ..
How can a forward contract backfire : How can a forward contract backfire?
Compute the present value of an annuity : Compute the present value of an annuity of $ 750 per year for 19 years, given a discount rate of 10 percent per annum. Assume that the first cash flow will occur one year from today
The accounting break-even quantity : A project has the following estimated data: price = $50 per unit; variable costs = $33 per unit; fixed costs = $22,000; required return = 10 percent; initial investment = $21,000; life = three years. Ignoring the effect of taxes, what is the accou..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd