Determine amount at which Beech should report its inventory

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Question - In the fourth quarter of Year 1, Beech Corporation produced three products (related to different product lines) that it still has in inventory at December 31, the end of its fiscal year. The following table provides information about each product:

Product

Cost

Replacement Cost

Selling Price

101

$130

$140

$160

202

$160

$135

$140

303

$100

$90

$70

On December 31, Year 2, Beech Corporation still had the same three different products in its inventory. The following table provides updated information for the company's products:

Product

Cost

Replacement Cost

Selling Price

101

$130

$180

$190

202

$160

$150

$160

303

$100

$100

$130

Beech Corporation still expects to incur selling costs equal to 5 percent of the selling price.

Required -

(a) Determine the amount at which Beech should report its inventory on the December 31, Year 2, balance sheet.

(b) How would your answer above differ if Beech used U.S. GAAP rather than IFRS?

Reference no: EM132818293

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