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3 years ago

Explain what lower of cost or market means in regards to reporting merchandise inventory on the balance sheet.

Business

1 answer:

Degger [83]3 years ago

4 0

Answer and Explanation:

Inventory is an asset and is posted on the asset side of the balance sheet. As per accounting standards regarding inventory valuation, it can be either valued at historical cost or at market price, whichever is lower.

Historical cost is the cost at which asset was acquired. Market price is the price which would be received if the asset is replaced as on the date on which balance sheet is prepared. Inventory is valued at lower of the above mentioned costs.

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The financial statements of a company are the primary sources of information that enable us to communicate the financial results

maks197457 [2]

Answer: both internally and externally

Explanation: In simple words, financial statements refers to the group of reports and statements that are prepared by an organisation for communication its financial performance and postilion to its internal and external stakeholders.

It constitutes balance sheet, cash flow statement and income statement etc.

4 0

3 years ago

Zoe Corporation has the following information for the month of March: Purchases $92,000 Materials inventory, March 1 6,000 Mater

Rufina [12.5K]

,Answer:

Zoe Corporation

Statement of Cost of Good Manufactured For the Month Ended March 31

Work in Process Inventory 22,000

Direct Materials:

Materials inventory, March 1 6,000

Purchases 92,000

Less Materials inventory, March 31 ( 8,000)

Cost of Materials used in Production 90,000

Direct Labor 25,000

Factory Overhead 37,000

152,000

Total Manufacturing Cost 174,000

Less Work in Process Inventory, March 31 (23,500)

Cost of Goods Manufactured 150,500

7 0

3 years ago

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment, and the firm has no excess

OlgaM077 [116]

Answer:

Explanation:

1.Total Debt = Total Assets – Total Equity = 2,700,000 – 1,550,000

= $1,150,000

2.Total assets = Total liabilities +Total equity = $2,700,000

3.Current Assets = Total Assets – Plant and Equipment = 2,700,000-2,300,000 = 400,000

4.Current Liabilities = Total Liabilities – Long term debt = 1,150,000 – 748,000 = $402000

5.Accounts payables and accruals = current liabilities – notes payables

= 402000 – 150,000 = $252000

6.Working capital = Current Assets – Current Liabilities = 400,000-402,000

= -2000

7.Net operating working capital = Current assets – Accounts payables and accruals = 400,000 – 252,000 = 148,000

8.Difference = -2,000-148,000 = -150,000 (indicates note payable)

Recalculation with new information:

1.Total Debt = Total Assets – Total Equity = 4,000,000 – 2,000,000 -500,000 =

= $1,500,000

2.Total assets = Total liabilities +Total equity = $4,000,000

3.Current Assets = Total Assets – Plant and Equipment = 4,000,000-3,000,000 = $1,000,000

4.Current Liabilities = Total Liabilities – Long term debt = 1,500,000 – 950,000 = $550000

5.Accounts payables and accruals = current liabilities – notes payables

= 550,000 – 150,000 = $400,000

7 0

3 years ago

The Daily Grind sells coffee makers. Its inventory of coffee makers without timers cost $20,000 and is now valued at $10,000. It

tiny-mole [99]

Answer:

$45,000

Explanation:

LCM (lower of cost or market) is an inventory valuation method that uses the lower figure between the cost of purchase of an inventory, and the price at which it can be currently replaced in the market, as the carrying amount of the inventory.

Accordingly, using LCM, the value of Daily Grind's inventory

= lower value of (inventory of coffee makers without timer) + (inventory of coffee makers with timer)

= 10,000 + 35,000

= $45,000

3 0

3 years ago

(02.03 MC) Bernadette wants to set aside some money, but she wants to have easy access to it without penalty. She is not worried

elena-14-01-66 [18.8K]

Answer:

Traditional savings account

Explanation:

A Traditional savings account is a banks or other financial institution's interest-bearing deposit fund.

While these accounts usually pay a moderate rate of interest, their stability and efficiency make them a decent option for short-term saving cash that you want.

Traditional savings accounts have some constraints on how many times one can withdraw money, however they usually offer outstanding versatility that is suitable for developing an emergency savings, or merely sweeping excess cash that you don't need in your checking account so you can earn more interest somewhere else.

8 0

4 years ago