Read the statement below for Beardsley Company:
“Inventories are stated at the lower of cost, (computed using the first-in, first-out method), or net realizable value. Any adjustments to reduce the cost of inventories to their net realizable value are recognized in earnings in the current period.”
How does Beardsley Company value & report its ending inventory in the Balance Sheet?
a.Applies only net realizable value
b.Adjustments are charged to Cost of Goods Sold in period value is reduced
d.Lower of cost or net realizable value
e.Only uses cost using cost flow assumption of first in, first out
The following headline appeared in a local paper.
“Northwestern Medicine building $46 million dollar wellness and fitness center in DeKalb, IL”
After construction of the building is completed, where would you find its cost included in the financial statements?
a.Income Statement: Depreciation Expense
b.Balance Sheet: Property, Plant & Equipment–Buildings
c.Balance Sheet: Property, Plant & Equipment–Accumulated Depreciation
d.Balance Sheet: Construction in Progress
e.Balance Sheet: Property, Plant & Equipment–Land