Lower of cost or market for inventory. Cemex S.A., a Mexican cement and construction firm, reported ending
Question:
Lower of cost or market for inventory. Cemex S.A., a Mexican cement and construction firm, reported ending inventory, net for the year ended December 31, 2007, of $19,631 million (all amounts reported in millions of Mexican pesos). During fiscal 2007, Cemex reported that application of the lower-of-cost-or-market rule to inventories resulted in an impairment of $131 million. Cemex’s allowance account for inventory impairments had an ending balance of $556 million.
a. What was the gross value of Cemex’s inventory at December 31, 2007?
b. What journal entry did Cemex make in 2007 to record the impairment charge for inventory?
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis