MGAB01H3 Lecture Notes - Lecture 9: Brm P83, Consignee, Inventory Turnover

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Published on 4 Apr 2016
School
UTSC
Department
Financial Accounting
Course
MGAB01H3
Professor
Chapter 8(2) – In Class Discussion Questions
E8–16 Reporting Inventory at Lower of Cost and Net
Realizable Value
Fine Leather Ltd. had the following inventory at December 31,
2014:
Required:
1. Determine the value of ending inventory that should be
reported on the statement of financial position by applying the
LCNRV rule to
1. Each item of inventory
2. Each major category of inventory
3. Total inventory
2. Which of the computations in (1) results in the lowest net
earnings for 2014? Explain.
3. Which level of inventory aggregation (individual item basis,
major categories, or total inventory) is permitted by IFRS?
Why are the other levels of aggregation not acceptable?
Explain.
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Document Summary

E8 16 reporting inventory at lower of cost and net. Fine leather ltd. had the following inventory at december 31, Required: determine the value of ending inventory that should be reported on the statement of financial position by applying the. Sony corporation manufactures and sells cell phones directly to mobile telecommunications service suppliers. The company reported the following amounts for fiscal year 2013 (in billions of yen): Justify your answers: have parts inventory delivered daily by suppliers instead of weekly, extend payments for inventory purchases from 30 days to. 45 days: shorten the production process from 10 days to 8 days. Compute the inventory turnover ratio under the fifo and weighted-average inventory costing methods and a perpetual inventory system (show computations and round to the nearest dollar). Explain which method you believe is the better indicator of the efficiency of inventory management. P8 1 analyzing items to be included in inventory.

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