Question: When and why would a NFPO use replacement cost rather than net realizable value to determine whether or not inventory should be written down?

When and why would a NFPO use replacement cost rather than net realizable value to determine whether or not inventory should be written down?

Step by Step Solution

★★★★★

3.40 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

A NFPO may hold inventories whose future economic benefits or service potential are not directly rel... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

464-B-A-N-P-O (899).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

When a test is conducted to determine whether or not someone is infected with a particular virus, an incorrect test result can occur in two ways: A infected person may test negative, or a noninfected...

Q:

A researcher is asked to determine whether or not a productivity objective (in dollars) of better than $75,000 per employee is possible. A productivity test is done involving 20 employees. What...

Q:

A man wants to determine whether or not to invest $1000 in a friend's speculative venture. He will do so if he thinks he can get his money back in one year. He believes the probabilities of the...

Q:

When would the replacement cost of inventory be used as the market value under the lower-of-cost-or-market method? a. When replacement cost is below net realizable value less normal profit margin b....

Q:

Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Product Total Cost 101 $120,000 102 90,000 103 60,000 104 30,000 Total Replacement...

Q:

Tatum Company has four products in its Inventory. Information about the December 31, 2021, Inventory is as follows: Product Total Cost Total Replacement Cost $142,400 Total Net Realizable value 101...

Q:

The following is information taken from the June 30, 2020, balance sheet of Tippleton Company: Accounts receivable Less: Allowance for doubtful accounts $230,000 10,100 $219,900 Part 1 , ....

Q:

You work in the Accounting Policy Group of Radley International, Inc., a U . S . publicly - held manufacturer of women's handbags and other fashion accessories. In February 2 0 2 0 , Radley acquired...

Q:

You work in the Accounting Policy Group of Radley International, Inc., a U . S . publicly - held manufacturer of women's handbags and other fashion accessories. In February 2 0 2 0 , Radley acquired...

Q:

2. The original cost of an inventory item is above the replacement cost and the net realizable value. The replacement cost is below the net realizable value less the normal profit margin. As a...

Q:

Do state laws that criminalize sodomy between members of the same or opposite sex violate the constitutional right of privacy? Equal protection clause? Are such laws necessary in a free society?

Q:

An Edmonton-based oil refinery is considering a phased expansion. It would involve the following: (i) Building a new, commercial-scale plant immediately. (ii) Further investments, in three years...

Q:

This exercise extends Exercise 2. Every 500 milliseconds, change the color of the colored squares and redisplay the board. Continue until you have shown the board 16 times, using all possible 4-bit...

Q:

Do not train just to do training; know what outcomes you expect from your training dollars, and measure your training results to be sure you get them.

Q:

Refer to the preceding information for Paulcraft's acquisition of Switzer's common stock. Assume that Paulcraft pays $480,000 for 100% of Switzer common stock. Paulcraft uses the cost method to...

Q:

On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000,...

Q:

On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. On this date, Solar has common stock, other paid-in capital in excess of par, and retained earnings...

Q:

The dividend yield on Alpha's common stock is 5.2 percent. The company just paid a $2.10 dividend. The rumor is that the dividend will be $2.30 next year. The dividend growth rate is expected to...

Q:

A call option has an exercise price of $50. What is the value of the call option at expiration if the stock price is $35? $75? A put option has an exercise price of $30. What is the value of the put...

Q:

Mergers, Acquisitions, and Other Restructuring Activities 8th Edition By Donald DePamphilis Chapter 10 Problem 15 (Practice Problems and Answers) 10.15 PPA You have been asked by an investor to value...