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Semester 3 , August 2 0 2 4 Topic: Accounting Principles ABC Manufacturing C o . is preparing its financial statements for the year ended
Semester August
Topic: Accounting Principles
ABC Manufacturing is preparing its financial statements for the year
ended December The company is considering the valuation of
its inventory and has the following information:
Inventory on Hand: units
Historical Cost per Unit: $
Replacement Cost per Unit: $
Net Realizable Value per Unit: $
Normal Selling Price per Unit: $
Estimated Selling Costs per Unit: $
Question:
Using the conservatism principle, calculate the value at which the
inventory should be reported on the balance sheet as of December
XYZ Corporation is preparing its financial statements for the year ended
December The company has a policy that any item or error
amounting to or more of the net income before tax is considered
material. The following financial information is available:
Net Income before Tax: $
Error Discovered in Inventory Valuation: $
Question:
Determine whether the error in inventory valuation should be corrected in
the financial statements based on XYZ Corporation's materiality threshold.
GHI Corporation purchased a piece of land on January for
$ The company is preparing its financial statements for the year
ended December During this period, the following events related
to the land occurred:
Market Value of Land as of December : $
Property Tax Assessment Value as of December : $
Cost of Land Improvements in : $
Question:
Using the historical cost principle, determine the value at which the land
should be reported on GHI Corporation's balance sheet as of December
Should the market value or the property tax assessment value
be considered in the financial statements?
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