Carpenter Corporation is a United Stated merchandising business. The corporation
ID: 2438760 • Letter: C
Question
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 Cost of Merchandise Sold on the restated Income Statement which will be acceptable under both US GAAP and International IFRS, for the month ended September 30? Sep. 1 Inventory 28 units at $23 4 Sold 16 units 10 Purchased 30 units at $28 17 Sold 23 units 30 Purchased 17 units at $30
Explanation / Answer
Solution: $952
Working:
The cost flow of assumption must be changed from LIFO to FIFO
Units
Unit cost
Amount
Sep-04
16
23
368
Sep-17
12
23
276
11
28
308
952
Units
Unit cost
Amount
Sep-04
16
23
368
Sep-17
12
23
276
11
28
308
952