Use the exhibits to determine the appropriate measure of the inventory in the company's year-end financial...

     

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Use the exhibits to determine the appropriate measure of the inventory in the company's year-end financial statements for each of the independent situations described below. Select from the option list provided the correct choice. Each choice may be used once, more than once, or not at all. Situation 1. Abi accounts for its inventory using the moving-average cost method. The estimated: costs of completion and disposal of inventory are $10,000. 2. Abi accounts for its inventory using the FIFO cost method. The estimated costs of completion and disposal of inventory are $15,000. 3. Abi accounts for its inventory using the LIFO cost method. The estimated costs of completion and disposal of inventory are $10,000. 4. Abi accounts for its Inventory using the FIFO cost method. The estimated costs of completion and disposal of inventory are $10,000. 5. Abi accounts for its inventory using the LIFO cost method. The estimated costs of completion and disposal of inventory are $3,000. 6. Abi accounts for its inventory using the FIFO cost method. In its third-quarter interim financial statements, Abi recognized a loss on inventory write-down of $12,000. This inventory was reported at $96,000. The estimated costs of completion and disposal of inventory are $10,000. Answer m E m Email re: Assignment To: From: Date: Re: April, April Strauss, Accounting Manager Mike Francis, CEO January 12, Year 11 Assignment X The rest of the board and I are trying to determine if our current inventory cost flow method is the most efficient and effective method to achieve our objectives. Unfortunately, we are all too busy to do the necessary work to make the determination. That is why we need your help. To help determine the appropriate costing method, I have laid out six separate scenarios. I will need you to consider each scenario independently, and then determine the appropriate measure of the inventory in our year-end financial statements. Unless stated otherwise, Abi prepares its financial statements under U.S. GAAP Let me know if you have any problems. Sincerely, Mike Inventory for Abi Company Abi's inventory at its fiscal year end on December 31, Year 10. Estimated selling price Current replacement cost Normal profit margin $120,000 100,000 15,000 NOTE: This inventory was purchased on June 30, Year 10, for $108,000 and the inventory was not sold by the end of the year. X Newspaper Profile of Abi Company OS on Key members: Established: Industry: Mission statement: Key highlights: Key stats: Featured Company of the Week: Abi Company Mike Francis, CEO; Judy Schmidt, CFO, Lonnie Reitz, COO January, Year 1, Fort Myers, FL Hobbies/Games To make even the smallest pawn feel like a king. Abi Company is a public company that manufactures and sells chessboards. Over 1,000,000 chessboards sold since inception and 5-time winner of best chessboard design in Florida x Use the exhibits to determine the appropriate measure of the inventory in the company's year-end financial statements for each of the independent situations described below. Select from the option list provided the correct choice. Each choice may be used once, more than once, or not at all. Situation 1. Abi accounts for its inventory using the moving-average cost method. The estimated: costs of completion and disposal of inventory are $10,000. 2. Abi accounts for its inventory using the FIFO cost method. The estimated costs of completion and disposal of inventory are $15,000. 3. Abi accounts for its inventory using the LIFO cost method. The estimated costs of completion and disposal of inventory are $10,000. 4. Abi accounts for its Inventory using the FIFO cost method. The estimated costs of completion and disposal of inventory are $10,000. 5. Abi accounts for its inventory using the LIFO cost method. The estimated costs of completion and disposal of inventory are $3,000. 6. Abi accounts for its inventory using the FIFO cost method. In its third-quarter interim financial statements, Abi recognized a loss on inventory write-down of $12,000. This inventory was reported at $96,000. The estimated costs of completion and disposal of inventory are $10,000. Answer m E m Email re: Assignment To: From: Date: Re: April, April Strauss, Accounting Manager Mike Francis, CEO January 12, Year 11 Assignment X The rest of the board and I are trying to determine if our current inventory cost flow method is the most efficient and effective method to achieve our objectives. Unfortunately, we are all too busy to do the necessary work to make the determination. That is why we need your help. To help determine the appropriate costing method, I have laid out six separate scenarios. I will need you to consider each scenario independently, and then determine the appropriate measure of the inventory in our year-end financial statements. Unless stated otherwise, Abi prepares its financial statements under U.S. GAAP Let me know if you have any problems. Sincerely, Mike Inventory for Abi Company Abi's inventory at its fiscal year end on December 31, Year 10. Estimated selling price Current replacement cost Normal profit margin $120,000 100,000 15,000 NOTE: This inventory was purchased on June 30, Year 10, for $108,000 and the inventory was not sold by the end of the year. X Newspaper Profile of Abi Company OS on Key members: Established: Industry: Mission statement: Key highlights: Key stats: Featured Company of the Week: Abi Company Mike Francis, CEO; Judy Schmidt, CFO, Lonnie Reitz, COO January, Year 1, Fort Myers, FL Hobbies/Games To make even the smallest pawn feel like a king. Abi Company is a public company that manufactures and sells chessboards. Over 1,000,000 chessboards sold since inception and 5-time winner of best chessboard design in Florida x

Answer rating: 100% (QA)

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