The Following Information Pertains to Inventory Held by a Company

question 43

Multiple Choice

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } \text { Historical cost } & \$ 30,000 \\\text { Replacement cost } & \$ 20,000 \\\text { Net realizable value } & \$ 27,000 \\\text { Normal profit margin } & 20 \%\end{array}$$
-As a result of inventory loss, what is the difference in income between reporting using U.S. GAAP and IFRS?

• A) U.S. GAAP income is $3,000 higher.
• B) U.S. GAAP income is $10,000 lower.
• C) IFRS income is $8,400 higher.
• D) IFRS income is $3,000 lower.
• E) IFRS income is $5,400 higher. U.S. GAAP loss is $8,400 and IFRS loss is $3,000 resulting in IFRS income being $5,400 higher.

Understand the process of issuing, appealing, and enforcing cease-and-desist orders by the FTC.

Become aware of federal legislation regulating food, drugs, and consumer safety.

Calculate net price given list price and trade discount.

Calculate list price given net price and trade discount.

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