西方财务会计 原版课件09

Chapter9-1Chapter9-2CHAPTER9INVENTORIES:ADDITIONALVALUATIONISSUESIntermediateAccounting13thEditionKieso,Weygandt,andWarfieldChapter9-31.Describeandapplythelower-of-cost-or-marketrule.2.Explainwhencompaniesvalueinventoriesatnetrealizablevalue.3.Explainwhencompaniesusetherelativesalesvaluemethodtovalueinventories.4.Discussaccountingissuesrelatedtopurchasecommitments.5.Determineendinginventorybyapplyingthegrossprofitmethod.6.Determineendinginventorybyapplyingtheretailinventorymethod.7.Explainhowtoreportandanalyzeinventory.LearningObjectivesChapter9-4NetrealizablevalueRelativesalesvaluePurchasecommitmentsLower-of-Cost-or-MarketValuationBasesGrossProfitMethodRetailInventoryMethodPresentationandAnalysisCeilingandfloorHowLCMworksApplicationofLCM“Market”EvaluationofruleGrossprofitpercentageEvaluationofmethodConceptsConventionalmethodSpecialitemsEvaluationofmethodPresentationAnalysisInventories:AdditionalValuationIssuesChapter9-5Market=ReplacementCostLowerofCostorReplacementCostLossshouldberecordedwhenlossoccurs,notintheperiodofsale.Acompanyabandonsthehistoricalcostprinciplewhenthefutureutility(revenue-producingability)oftheassetdropsbelowitsoriginalcost.Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.LCMChapter9-6DeclineintheRCusually=declineinsellingprice.RCallowsaconsistentrateofgrossprofit.IfreductioninRCfailstoindicatereductioninutility,thentwoadditionalvaluationlimitationsareused:Ceiling-netrealizablevalueandFloor-netrealizablevaluelessanormalprofitmargin.WhyuseReplacementCost(RC)forMarket?Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.CeilingandFloorChapter9-7NotCostMarketCeiling=NRVReplacementCostFloor=NRVlessNormalProfitMarginGAAPLCMWhatistherationalefortheCeilingandFloorlimitations?Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.NotIllustration9-3Chapter9-8Ceiling–preventsoverstatementofthevalueofobsolete,damaged,orshopworninventories.Floor–detersunderstatementofinventoryandoverstatementofthelossinthecurrentperiod.Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.RationaleforLimitationsChapter9-9Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.HowLCMWorks(IndividualItems)Illustration9-5SolutiononnotespageChapter9-10Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.MethodsofApplyingLCMIllustration9-6SolutiononnotespageChapter9-11LO1Describeandapplythelower-of-cost-or-marketrule.Lower-of-Cost-or-MarketRecordingLCM(datafromIllus.9-5and9-6)Endinginventory(cost)$415,000Endinginventory(LCM)350,000AdjustmenttoLCM$65,000Allowanceoninventory65,000Lossoninventory65,000Inventory65,000Costofgoodssold65,000AllowanceMethodDirectMethodChapter9-12AllowanceDirectCurrentassets:Cash100,000$100,000$Accountsreceivable350,000350,000Inventory770,000705,000Less:inventoryallowance(65,000)Prepaids20,00020,000Totalcurrentassets1,175,0001,175,000LO1Describeandapplythelower-of-cost-or-marketrule.Lower-of-Cost-or-MarketBalanceSheetPresentationChapter9-13AllowanceDirectSales300,000$300,000$Costofgoodssold120,000185,000Grossprofit180,000115,000Operatingexpenses:Selling45,00045,000Generalandadministrative20,00020,000Totaloperatingexpenses65,00065,000Otherrevenueandexpense:Lossoninventory65,000-Interestincome5,0005,000Totalother(60,000)5,000Incomefromoperations55,00055,000Incometaxexpense16,50016,500Netincome38,500$38,500$LO1Describeandapplythelower-of-cost-or-marketrule.Lower-of-Cost-or-MarketIncomeStatementPresentationChapter9-14P9-1:KCCompanymanufacturesdesks.Thecompanyattemptstoobtaina20%grossmarginonsellingprice.AtDecember31,2010,thefollowingfinisheddesksappearinthecompany’sinventory.Instructions:Atwhatamountshouldthedesksappearinthecompany’sDecember31,2010,inventory,assumingthatthecompanyhasadoptedalower-of-FIFO-cost-or-marketapproachforvaluationofinventoriesonanindividual-itembasis?FinishedDesksABCDInventorycost470$450$830$960$Est.costtomanufacture4604306101,000Commissionsanddisposalcosts506080130Catalogsellingprice5005409001,200Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.Chapter9-15NotCost=470Market=450Ceiling=450(500–50)ReplacementCost=460Floor=350(450-(500x20%))LCM=450Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.NotFinishedDesksAInventorycost470$Est.costtomanufacture460Commissionsanddisposalcosts50Catalogsellingprice500Chapter9-16NotCost=450Market=430Ceiling=480(540–60)ReplacementCost=430Floor=372(480-(540x20%))LCM=430Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.NotFinishedDesksBInventorycost450$Est.costtomanufacture430Commissionsanddisposalcosts60Catalogsellingprice540Chapter9-17NotCost=830Market=640Ceiling=820(900–80)ReplacementCost=610Floor=640(820-(900x20%))LCM=640Lower-of-Cost-or-MarketLO1Describeandapplythelower-of-cost-or-marketrule.NotFinishedDesksCInventorycost830$Est.costtomanufacture610Commissionsanddisposalcosts80Catalogsellingprice900Chapter9-18NotCost=960Market=1,000Ceiling=1,07