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Chapter 9: Q4ISTQ (page 499)

Assume that Darcy Industries had the following inventory values. Inventory cost (on December 31, 2017) \(1,500 Inventory market (on December 31, 2017) \)1,350 Inventory net realizable value (on December 31, 2017) \(1,320 Under IFRS, what is the inventory carrying value on December 31, 2017? (a) \)1,500. (b) \(1,570. (c) \)1,560. (d) $1,320

Short Answer

Expert verified

The correct option is “d.”

Step by step solution

01

Estimation of inventory value

(d) The inventory cost is $1,500, and the net realizable value is $1,320. Hence inventories will be reported at the net realizable value, as it is the lowest compared to the inventory cost.

02

Explanation of wrong options

(a) Inventories carrying value will not be equal to the cost, as market value and NRV is below the original cost.

(b) $1,570 incorrectly estimated.

(c) $1,560 incorrectly estimated.

Thus, the correct option is $1,320.

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Most popular questions from this chapter

Presented below is information related to Langston Hughes Corporation. Price LIFO Index Cost Retail Inventory on December 31, 2017, when dollar-value LIFO is adopted 100 \(36,000 \) 74,500 Inventory, December 31, 2018 110 ? 100,100 Instructions Compute the ending inventory under the dollar-value LIFO method at December 31, 2018. The cost-to-retail ratio for 2018 was 60%.

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