Question Details

Shake Company- inventory experienced a decline 


1.	Which of the following is not an acceptable method of applying the lower-of-cost-or-net realizable value method to inventory?
a.	Inventory location.
b.	Groups of inventory items.
c.	Individual item.
d.	Total of the inventory.

	2.	Which method(s) may be used to record a loss due to a price decline in the value of inventory?
a.	Loss method.
b.	Sales method.
c.	Cost-of-goods-sold method.
d.	Both a and c.

3.	When inventory declines in value below original (historical) cost what is the maximum amount that the inventory can be valued at?
a.	Sales price
b.	Net realizable value
c.	Historical cost
d.	Sales price reduced by estimated costs to sell

	4.	Net realizable value is
a.	fair value plus estimated costs to complete and make a sale.
b.	selling price.
c.	selling price plus estimated costs to complete and make a sale.
d.	selling price less estimated costs to complete and make a sale.

	5.	Shake Company- inventory experienced a decline in value necessitating a write-down to lower of cost or net realizable value (LCNRV) of $230,000. This amount is material to Shake- income statement and the company follows IFRS. Where should Shake Company report this decline in value according to IFRS?
				I.	As a loss on the income statement.
				II.	As a separate component of other comprehensive income on the statement 			of comprehensive income.
				III.	As part of cost of goods sold on the income statement.
a.	Shake must use I.
b.	Shake must use I, II or III.
c.	Shake must use I, or III.
d.	Shake must use III.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help