1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
irina [24]
2 years ago
5

A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's cur

rent inventory consists of 200 units purchased at $16 per unit. Replacement cost has now fallen to $13 per unit. What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?
Business
1 answer:
nata0808 [166]2 years ago
8 0

Answer:

$200 (a deduction)

Explanation:

The accounting standard for inventories IAS 2 requires that inventory be carried at the lower of cost or net realizable value. Inventory will initially be recognized at the cost ( which includes the cost of the item and other associated cost such as freight ). However, its carrying amount must be reviewed to ensure it is not higher than the realizable value.

Given that the selling price is now $15 which is lower than the cost of $16, it means that the amount that can be realized from the sale of a unit is $15.

= $16 - $15

= $1

As such, an adjustment in form of a reduction of the carrying amount of $1 per unit is required. The amount of the lower cost of market adjustment the company must make as a result of this decline in value

= $1 × 200 units

= $200 (a deduction)

You might be interested in
In most organizations, who is primarily responsible for appraising an employee's performance
ivanzaharov [21]
It is and should be the managers job to do that
8 0
3 years ago
Draw a graph which depicts long run equilibrium of transnet
Nookie1986 [14]
I will not be able to illustrate the graph in the dialog box but instead, the writer will describe the long-run equilibrium of transnet. Long-run equilibrium in economics focuses on the period of time where the resource is still available and what is its costs and quantity produced. 
8 0
3 years ago
XYZ Corporation 10-year bonds paid its annual coupon of $110 yesterday. There are seven (7) annual coupons remaining. The bond h
Brums [2.3K]

Answer:

Price of the bond is $1,215.57

Explanation:

Price of the bond is actually the present value of all cash flows of the bond.  Price of the bond is calculated by following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond = $110 x [ ( 1 - ( 1 + 7% )^-7 ) / 7% ] + [ $1,000 / ( 1 + 7% )^7 ]

Price of the Bond = $592.82 + $622.75

Price of the Bond = $1,215.57

4 0
3 years ago
I want to talk does anybody want to talk to me? I will name you brainliest if you do.
statuscvo [17]

Answer:

Sure! Is there any platform you want to talk on?

Explanation:

5 0
2 years ago
1. Which HR practices do you believe are the most critical for Marriott to maintain and grow its competitive advantage?
AnnZ [28]

Answer:

eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

Explanation:

3 0
3 years ago
Other questions:
  • What does it mean to adopt a maturity matching approach to financing assets, including current assets? How would a more aggressi
    8·1 answer
  • For the questions below, select the appropriate answer.
    5·1 answer
  • Who sells dragon scales? Ya know like the ones ya put on chainmail. I need to know like soon.
    13·1 answer
  • Why does actual group productivity never equal potential productivity?
    10·1 answer
  • Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015. The company's statement of cash
    14·1 answer
  • Question 1 What forces have caused cost and management accounting systems designed decades ago to become less relevant and less
    12·1 answer
  • As a manager for XYZ Company. you are assigned to resolve a conflict between two departments of your organization.Both parties h
    9·1 answer
  • Determine the type of credit that involves a set limit based on what a consumer pays up front.
    10·1 answer
  • Borland, Inc. issues 25-year semi-annual bonds that have a face value of $1,000 and a coupon rate of 7.5%. The current market pr
    14·1 answer
  • Writing down that the National Entrepreneurship Foundation is available to
    13·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!