Determine the amount of which katy co should report

Reference no: EM131894915

Problem

Katy Co. has three finished products (related to the three different product lines) in its ending inventory at December 31, 2017. The following table provides additional information about each product. Assuming that these three products related to three different product lines, grouping would not be allowed. Katy Co. expects to incur selling costs equal to 5% of the selling price of each of the products.

Product	Cost	RC	S. Price	S. Costs	Normal PM
X100	$235	$240	$250	10%	20%
X200	$180	$190	$210	10%	20%
X300	$160	$140	$190	10%	15%
Total	$575

We learned that, if inventory declines in value below its original cost, a company should write down the inventory to market to report the loss in both U.S. GAAP and IFRS and that the IFRS and U.S. defines the market differently. IFRS defines market as net realizable value. U.S. GAAP, on the other hand, defines market as replacement cost subject to the constraints of net realizable value (the ceiling) and net realizable value less a normal markup (the floor). IFRS does not use a ceiling or floor to determine market.

Required:

Determine the amount of which Katy Co. should report its inventory on the December 31, 2017 balance sheet under (a) U.S. GAAP and (2) IFRS.

Reference no: EM131894915

Questions Cloud

Video of the agreement and the video : Do you think you will be able to legally compel your friend to pay you based on the video of the agreement and the video of you beating your friend at tennis?

What type of organizational theories could walmart adapt : What type of organizational theories could Walmart adapt to correct issues in regard to high employee turnover, unfair treatment toward women.

Businesses benefit from global capital markets : How can international businesses benefit from global capital markets? What are some of the risks?

Assuming uniform distribution and normal distribution : For each substance, estimate the standard deviation s by assuming uniform distribution and normal distribution shown in Table 8.11 in Section 8.8.

Determine the amount of which katy co should report : Determine the amount of which Katy Co. should report its inventory on the December 31, 2017 balance sheet under (a) U.S. GAAP and (2) IFRS.

What is the theory of corporate social responsibility : What is the THEORY of Corporate Social Responsibility (CSR)? And how to APPLY to Marketing Management

Write a single statement that computes the product : Place the results in a register of the appropriate size, remember to consider efficient use of available resources.

Start strategic planning using the swot framework : At an individual level, we often ask people what their strengths are - what are you good at? Similarly, for companies we ask what their strengths.

How do you prioritize your day : Time management is critical and driven by prioritization. How do you prioritize your day? Where does online learning fit in?

User Account

All Pages