Questions from Intermediate Accounting

Q: Adriana Co., with annual net sales of $5 million,

Adriana Co., with annual net sales of $5 million, maintains a markup of 25% based on cost. Adriana’s expenses average 15% of net sales. What is Adriana’s gross profit and net profit in dollars?

Q: The conventional retail inventory method yields results that are essentially the same

The conventional retail inventory method yields results that are essentially the same as those yielded by the lower-of-cost-or-market method. Explain. Prepare an illustration of how the retail invento...

Q: Deere and Company reported inventory in its balance sheet as follows:

Deere and Company reported inventory in its balance sheet as follows: Inventories ……………………….. $1,999,100,000 What additional disclosures might be necessary to present the inventory fairly?

Q: Where there is evidence that the utility of inventory goods, as

Where there is evidence that the utility of inventory goods, as part of their disposal in the ordinary course of business, will be less than cost, what is the proper accounting treatment?

Q: Explain the rationale for the ceiling and floor in the lower-

Explain the rationale for the ceiling and floor in the lower-of-cost-or-market method of valuing inventories.

Q: Why are inventories valued at the lower-of-cost-

Why are inventories valued at the lower-of-cost-or-market? What are the arguments against the use of the LCM method of valuing inventories?

Q: What factors might call for inventory valuation at sales prices (net

What factors might call for inventory valuation at sales prices (net realizable value or market price)?

Q: Under what circumstances is relative sales value an appropriate basis for determining

Under what circumstances is relative sales value an appropriate basis for determining the price assigned to inventory?

Q: Calder, Inc. is a furniture manufacturing company with 50 employees

Calder, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its comp...

Q: What modifications to the conventional retail method are necessary to approximate a

What modifications to the conventional retail method are necessary to approximate a LIFO retail flow?