Flin Flon Limited sells three products whose prices are sensitive to price fluctuations. The following inventory information
Question:
Flin Flon Limited sells three products whose prices are sensitive to price fluctuations. The following inventory information is available for these products at March 31, 2014:
Instructions
(a) Calculate Flin Flon's inventory at the lower of cost and net realizable value.
(b) Prepare any journal entry required to record the LCNRV, assuming that Flin Flon uses a perpetual inventory system.
(c) Assume that Flin Flon still holds product C a year later and that it has recovered its decline in value and that the net realizable value of product C is now $11. Should Flin Flon carry its inventory of product C at March 31, 2015, at cost, net realizable value, or some other value? Explain.
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine