单选题
Information related to Bledsoe Corporation's inventory, as of December
31,2007, follows:
|
Estimated selling price |
$3500000 |
|
Estimated disposal costs |
50000 |
|
Estimated completions |
3000000 |
|
Original FIFO cost |
3200000 |
|
Replacement cost |
3300000 |
Using the
appropriate valuation method, what adjustment is necessary to accurately report
Bledsoe' s inventory at the end of 2007, and will this adjustment affect
Bledsoe' s quick ratio?
Adjustment
Quick ratio
①A. $
50000 write-down Yes
②B. $
50000 write-down No
③C.
$100000 write-up No
【正确答案】
B
【答案解析】Inventories are valued on the balance sheet at the lower of cost or net realizable value. Net realizable value is equal to $ 3150000 ($ 3500000 selling price $ 300000 completion costs $ 50000 disposal costs). Since the original cost of $ 3200000 exceeds the net realizable value of $ 3150000, a $ 50000 write-down is necessary. An inventory write-down has no impact on the quick ratio since inventory is excluded from both the numerator and denominator of the quick ratio.