4. Inventory Information: Historical Cost $50,000 Replacement Cost $42,000 Net r

Question

4. Inventory Information:
Historical Cost $50,000
Replacement Cost $42,000
Net realizable value less normal profit $37,000
Estimated Selling Price $65,000
Estimated costs of complete $12,000
Estimated cost to make sell $6,000
According to IFRS, what dollar amount should be written down for decline in inventory value?
A. $3,000
B. $8,000
C. $13,000
D. $14,500
E. $15,500



5. With respect to accounting for inventories, which of the following is a difference that exists for IFRS, as
opposed to U.S. GAAP?
A. There is required recognition of certain development costs.
B. The FIFO method of inventories is prohibited.
C. The specific identification method of inventories is only allowed when goods are interchangeable.
D. The weighted average method of inventories is prohibited.

Explanation / Answer

D. $14,500 C. The specific identification method of inventories is only allowed when goods are interchangeable.

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