Reference no: EM132884029

Problem - Inventory Write-Down - Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company's records:

Item	Units	Cost	Replacement Cost	Net Realizable Value
1	500	$10.00	$ 9.10	$ 9.20
2	400	8.00	8.10	7.80
3	300	15.00	13.50	14.00
4	200	18.00	12.00	17.00
5	100	25.00	25.50	25.30

Required -

1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule.

2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule.

3. Assume that Palmquist uses IFRS. Compute the correct inventory value under the lower of cost or net realizable value rule.

4. Next Level Explain the differences between the inventory valuations reported under IFRS and U.S. GAAP.