Inventory & Fixed Assets & Intangibles

(Note – Q1 thru Q4 are graded at 2.5 pts each. But each question within the main question I use a weighted point system to calculate the final grade). Example – if you get 4 pts on Q1, then you would be awarded 1.67 pts for Q1 (4/6 * 2.5). There is no penalty for writing much less words than the max. I looking for a concise answer, but also want to give you a little room should you feel you need it.

(Please use this format when submitting your answer and don’t remove my red mark annotations)

1.•CASE 8- 5. Adjusting lower cost of market inventory on valuation( 2.5 points)

Accountants generally follow the lower-of-cost or market basis of inventory valuations.

600 words max

Required:

a. 2 pt Define cost as applied to the valuation of inventories.

When applied to the valuation of inventories, the definition of cost is a sum of applicable expenditures and charges directly or indirectly acquired by bringing an item to its existing state and location (Schroeder, Clark, & Cathey, 2010).

b. 2 pt Define market as applied to the valuation of inventories.

When the term lower cost or market is applied to the valuation of inventories, the definition of market is the current replacement cost of the inventories without exceeding the net realized value, and without having less than the net realized value that is reduced by an allowance for the estimated normal profit margin (Schroeder, Clark, & Cathey, 2010).

c. 2 pt Why are inventories valued at the lower of cost or market? Discuss.

When the term lower cost or market is applied to the valuation of inventories, the definition of market is the current replacement cost of the inventories without exceeding the net realized value, and without having less than the net realized value that is reduced by an allowance for the estimated normal profit margin (Schroeder, Clark, & Cathey, 2010).

2.CASE 9-4 Self-Constructed Assets: Capitalizing interest...