Accounting Question

Q1

Compute the ending inventory and COGS at September 30 on each of the following on periodic bases.

1. FIFO

2. WA

Q2

Q2 IFRS requires capitalizing actual interest (with modification) Consistent with historical cost. Capitalization considers three items:

1.Qualifying assets.

2.Capitalization period.

3.Amount to capitalize.

Explain the above with numerical examples

Q3

A long-lived tangible asset is impaired when a company is not able to recover the asset’s carrying amount either through using it or by selling it. The management to identify whether the asset has impairment or no impairment conducts an impairment test. Explain how the impairment test conducted in both situations with numerical examples

1-XYZ Company’s record of transactions for the month of September was as follows.
Date
Sep 1
Sep 4
Sep 11
Sep 18
Sep 26
Sep 30
Total
Purchase
Quantity
Unit Price
Date
(Balance on $4.00
Sep 5
hand) 100
300
4.50
Sep 12
200
5.00
Sep 27
200
5.25
Sep 28
500
5.50
200
5.75
1,500
Total units (ending inventory) 350
Sales
Units
200
150
600
200
1,150
Required: (4 Marks)
Compute the ending inventory and COGS at September 30 on each of the following on
periodic bases.
1. FIFO
2. WA
Answer:
Q2 IFRS requires capitalizing actual interest (with modification) Consistent with historical
cost. Capitalization considers three items:
1. Qualifying assets.
2. Capitalization period.
3. Amount to capitalize.
Explain the above with numerical examples. (4 Marks)
Answer:
Q3 A long-lived tangible asset is impaired when a company is not able to recover the asset’s
carrying amount either through using it or by selling it. The management to identify
whether the asset has impairment or no impairment conducts an impairment test.
Explain how the impairment test conducted in both situations with numerical examples. (3
Mark)
Answer: