Effect of inventory valuation on the balance sheet and net income. ResellFast purchases residential and commercial real

Question:

Effect of inventory valuation on the and net income. ResellFast purchases residential and commercial real estate for resale. ResellFast has a December 31 year-end and prepares quarterly. On February 5, 2008, ResellFast acquired an open-air mall in Miami, Florida, with space for 15 retail businesses, for $20 million. On April 12, 2008, a storm flooded a portion of the mall, reducing the mall’s fair value to $16.5 million. On August 14, 2008, a large retailer announced plans to build a new store adjacent to the open-air mall: this announcement, combined with ResellFast’s repairs, attracted several smaller retailers to inquire about acquiring space in the open-air mall. By September 30, 2008, the fair value of the open-air mall had increased to $26 million. On November 8, 2008, ResellFast sold the mall for $27.5 million. Compute the carrying value of the open-air mall on ResellFast’s and the related income statement effect for each quarter of 2008. ResellFast follows U.S. GAAP.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...