Research the following questions and give authoritative

Assignment Help Accounting Basics

Reference no: EM13588737

Research the following questions and give authoritative support for your answer:

1. The accounting supervisor of Herfurth & Sons believes the company will have to record a loss for the write-down of inventory to the lower of cost or market based on the cost/market values of individual inventory items. The controller asks the supervisor to research the issue as he believes the lower of cost or market rule may be applied on another basis. Is the controller correct? Give applicable support for your answer.

2. In December 2012 Herfurth & Sons records a loss for the write-down of inventory to the lower of cost or market. Management wants to know if a subsequent change in facts and circumstances allows for restoration of inventory value, not to exceed original historical cost? Give applicable support for your answer.

3. Are losses recognized related to purchase commitments? If so, when are the losses recognized?

Reference no: EM13588737

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