Q1. Barber Inc. sells DVD recorders. On October 14, it purchased a large number of recorders at a cost of $90 each. Due to an oversupply of recorders remaining in the marketplace due to lower than anticipated demand during the Christmas season, the selling price at December 31 is $80 and the replacement cost is $73. The normal profit margin is 5 percent of the selling price and the selling costs are $2 per recorder.
What should Barber value the recorders at on December 31? A) $73. B) $78. C) $74.
Q2. Using the lower of cost or market principle under U.S. GAAP, if the market value of inventory falls below its historical cost, the minimum value at which the inventory can be reported in the financial statements is the: A) market price minus selling costs minus normal profit margin. B) net realizable value. C) net realizable value minus selling costs.
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发表于 2009-1-19 09:16
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