8.2 all parts

Product A Product B Historical cost Replacement cost Estimated cost of disposal Estimated selling price $ 80 70 32 150 $ 96 98 30 120 Required: 1. Assume that Stiles uses the FIFO cost flow assumption. What is the correct inventory value for each product? 2. Assume that Stiles uses the LIFO cost flow assumption. What is the correct inventory value for each product? 3. Next Level With regard to requirement 2, what effect does the imposition of the constraints on market value have on the inventory valuations? Lower of Cost or Market The following information for Tuell Company is available: E8-2 LO 8.1 Case 0000 Cost Net realizable value Net realizable value less normal profit Replacement cost $5.00 $5.00 $5.00 $5.00 5.50 4.80 4.70 5.30 5.20 $5.00 4.70 4.60 4.80 5.10 4.20 4.80 5.30 4.00 4.10 4.60 Required: 1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? 2. Assume Tuell uses the average cost inventory cost flow assumption. What is the correct inventory value in each of the preceding situations under U.S. GAAP? 3. What is the correct inventory value in each of the preceding situations if Tuell uses IFRS? 4. Explain any differences between U.S. GAAP and IFRS inventory valuations. E8-3 LO 8.1 Lower of Cost or Market The following information is taken from Aden Company's records: Product Group Units Cost/Unit Market/Unit 600 250 150 100 80 $ 1.00 1,50 5.00 6.50 $ 0.80 1.55 5.25 6.40 24.60 25.00 SHOW P8-2 Lower of Cost or Market The following are the inventories for the years 2016, 2017, and 2018 for Parry Company: LO 8.1 Cst Market January 1, 2016 December 31, 2016 December 31, 2017 December 31, 2018 $50,000 64,000 71,000 75,000 $50,000 60,000 70,000 78,000 Required: 1. Assume the inventory that existed at the end of cach year was sold in the subsequent year. Prepare journal entries to record the lower of cost or market for each of the following alternatives: allowance method, perpetual inventory system b. direct method, perpetual inventory system 2. Next Level Explain any differences in inventory valuation and income between the two methods. a