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Carpenter Corporation is a United Stated merchandising business. The corporation extensively uses scan technology in a...

Carpenter Corporation is a United Stated merchandising business. The corporation extensively uses scan technology in a perpetual inventory system; and in the past, the corporation has valued inventory using the LIFO cost flow assumption. Carpenter Corporation is seeking new markets outside the United States and wishes to restate its Inventory on the Financial Statements, based on International Financial Reporting Standards. Using the following information, and assuming that Carpenter Corporation will not use an average cost method of cost flows, what is the Ending Inventory on the re-stated Balance Sheet which will be acceptable under both US GAAP and International IFRS, at September 30? Sep. 1 Inventory 21 units at $20 4 Sold 11 units 10 Purchased 32 units at $28 17 Sold 28 units 30 Purchased 15 units at $32

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Answer #1

FIFO method is acceptable under both US GAAP and IFRS calculation.

date event opening/purchase cost of goods sold ending balance
units cost per unit total cost units cost per unit total cost units cost per unit total cost
Sep-01 opening balance 21 20 420 21 20 420
Sep-04 sales 11 units 11 20 220 10 20 200
Sep-10 purchase 32 units 32 28 896 10 20 200
32 28 896
Sep-17 sales 28 units 10 20 200
18 28 504 14 28 392
Sep-30 purchases 15 units 15 32 480 14 28 392
15 32 480
total 68 1796 39 924 29 872

ending inventory = 29 units, total value = $872

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