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ABC Grocers, Inc. Case Study - Adjusting Entires

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ACC321 Term Project ABC Grocers, Inc. Case Study - Inventory Name: ABC Grocer Inc Date: 12/31/11 Required: Calculate the value of inventory on hand under U.S. GAAP and compute necessary write-downs. Apply the LCM rule to each type of product. Record necessary adjusting journal entries in the template below. Then transfer the entries to the adjusting journal entry worksheet and the respective trial balance worksheet for 12/31/11. Finally, discuss how the inventory valuation would be different under IFRS. Part 1: U.S. GAAP Inventory Item Bread Butter Milk Hamburger Hot Dogs Units Cost per unit Replacement cost NRV (Ceiling) 177,000 0.65 0.70 0.85 250,000 1.00 1.10 1.30 150,000 2.50 2.00 2.25 175,000 3.45 3.00 3.25 200,000 2.75 2.85 3.00 Part 2: Journal Entries JE # Date JE #1 8/31/11 JE #2 8/31/11 work in process material Note: work in process Labour Note: Debit 616,500 NRV less normal Middle profit (Floor) value 0.60 0.70 0.91 1.10 1.58 2.00 2.28 3.00 2.10 2.85 LCM 0.65 1.00 2.50 3.45 2.75 Units 177,000 250,000 150,000 175,000 200,000 Value Original cost 123,900 115,050 275,000 250,000 300,000 375,000 525,000 603,750 570,000 550,000 1,793,900 1,893,800 Adjusting Entry -8,850 -25,000 75,000 78,750 -20,000 99,900 0 0 0 0 0 Credit 616,500 616,500 616,500 Part 3: IFRS Discussion According to GAPP system company adopt LIFO and FIFO system to maintain the profit and provide valuation for company. inventory required the account types of inventory system. the standar ...
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