Question Details

Which of the following will Rios, Inc. record in 2011 



1.	Robust Inc. has the following information related to an item in its ending inventory. Acer Top has a cost of $502, a selling price of $568, a cost to complete of $53, and a cost to sell of $38. What is the lower-of-cost-or-net realizable inventory value for Acer Top?
a.	$515.
b.	$502.
c.	$477.
d.	$530.

	2.	Rios, Inc. uses International Financial Reporting Standards (IFRS). In 2010, Rios, Inc. experienced a decline in the value of its inventory resulting in a write-down of its inventory from $240,000 to $200,000. The company used the loss method in 2010 to record the necessary adjustment and uses an allowance account to reduce inventory to NRV. In 2011, market conditions have improved dramatically and Rios, Inc.- inventory increases to an NRV of $216,000. Which of the following will Rios, Inc. record in 2011 ?
a.	A debit to Recovery of Inventory Loss for $16,000.
b.	A credit to Recovery of Inventory Loss for $24,000.
c.	A debit to Allowance to Reduce Inventory to NRV of $16,000.
d.	A credit to Allowance to Reduce Inventory to NRV of $24,000.

	3.	Dub Dairy produces milk to sell to local and national ice cream producers. Dub Dairy began operations on January 1, 2011 by purchasing 840 milk cows for $1,176,000. The company controller had the following information available at year end relating to the cows:
		Milking cows
		Carrying value, January1, 2011				$1,176,000
		Change in fair value due to growth and price changes	     365,000
		Decrease in fair value due to harvest				      (42,000)
		Milk harvested during 2011					      $54,000
		
		At December 31, 2011, what is the value of the milking cows on Dub Dairy- statement of financial position?
a.	$1,176,000
b.	$1,541,000
c.	$1,134,000
d.	$1,499,000

	4.	Dub Dairy produces milk to sell to local and national ice cream producers. Dub Dairy began operations on January 1, 2011 by purchasing 840 milk cows for $1,176,000. The company controller had the following information available at year end relating to the cows:
		Milking cows
		Carrying value, January1, 2011				$1,176,000
		Change in fair value due to growth and price changes	     365,000
		Decrease in fair value due to harvest				      (42,000)
		Milk harvested during 2011 but not yet sold			      $54,000

		On Dub Dairy- income statement for the year ending December 31, 2011, what amount of unrealized gain on biological assets will be reported?
a.	$ -0-
b.	$365,000
c.	$323,000
d.	$54,600
	5.	Dub Dairy produces milk to sell to local and national ice cream producers. Dub Dairy began operations on January 1, 2011 by purchasing 840 milk cows for $1,176,000. The company controller had the following information available at year end relating to the cows:
		Milking cows
		Carrying value, January1, 2011				$1,176,000
		Change in fair value due to growth and price changes	     365,000
		Decrease in fair value due to harvest				      (42,000)
		Milk harvested during 2011 but not yet sold			      $54,000

		On Dub Dairy- income statement for the year ending December 31, 2011, what amount of unrealized gain on harvested milk will be reported?
a.	No gain is reported until the milk is sold.
b.	$12,000
c.	$54,000
d.	$311,000



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