Question

The following is a list of items that may or may not be reported as inventory in Keesa Corp.'s December 31 balance sheet:
l. Goods out on consignment at another company's store
2. Goods sold on an installment basis
3. Goods purchased FOB shipping point that are in transit at December 31
4. Goods purchased FOB destination that are in transit at December 31
5. Goods sold to another company, with Keesa having signed an agreement to repurchase the goods at a set price that covers all costs related to the inventory
6. Goods sold where large returns are predictable
7. Goods sold FOB shipping point that are in transit at December 31
8. Freight charges on goods purchased
9. Freight charges on goods sold
10. Factory labour costs incurred on goods that are still unsold
11. Interest costs incurred for inventories that are routinely manufactured in large quantities
12. Costs incurred to advertise goods held for resale
13. Materials on hand and not yet placed into production by a manufacturing firm
14. Office supplies
15. Raw materials on which a manufacturing fmn has started production, but which are not completely processed
16. Factory supplies
17. Goods held on consignment from another company
18. Goods held on consignment by another company
19. Costs identified with units completed by a manufacturing firm, but not yet sold
20. Goods sold FOB destination that are in transit at December 31
2 1. Temporary investments in shares and bonds that will be resold in the near future
22. Costs of uncleared land to be developed by a property development company
23. Cost of normal waste or spoilage of raw materials during production
24. Cost of waste and spoilage experienced above normal levels; that is, abnormal levels of waste of raw materials
25. Costs to store excess materials inventory for a manufacturer
26. Costs to store wine as it ages for a wine producer
27. Decommissioning costs incurred as a part of the extraction of minerals
Instructlons
(a) Assuming that ASPE is followed, indicate which of these items would typically be reported as inventory in the financial statements. If an item should not be reported as inventory, indicate how it should be reported in the financial statements.
(b) How would your response to (a) change under IFRS?


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  • CreatedSeptember 18, 2015
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