Individual Assignment #2
Week Two
invoice Theory and Research Acctg 541
June 8, 2009
Mr. James Johnson
Dear Mr. Johnson,
This letter is in response to questions and concerns regarding the five full stops listed below that our firm previously request additional information for in fix to complete the 2008 pecuniary compliance audit. Mr. Johnson, below I have listed the five items that concerns the confederacy at this time. They include:
1. Adjusting the lower cost of grocery on livestock valuation.
2. Capitalizing interest on building construction.
3. Recording get together or loss on asset disposal.
4. Adjusting goodwill for impairment.
Mr. Johnson I will explain each of the items listed above in order which they are listed. The first concern was why I had questions in reference to how your stemma was valuated for cost. The lower of cost or market for pedigree can be value inventory trio different ways. The first is on a total inventory basis. The entropy is by inventory categories and the tertiary basis is item by item. (Source: www.accountingcoach.com/online-accounting-course/27Xpg04.
html#lower-cost-market-inventory, Explanation of the topic; Applying Lower of Cost or grocery store to Inventory)
The first basis which is by total inventory is least conservative because it allows for the lowest decrease in inventory from cost and a lower loss on the income statement. The second basis of apply lower of cost or market results produces a median which falls between the first and third basis methods. The third basis method, which is item by item, is the intimately conservative because it provides the largest decrease of cost from inventory and the largest loss on the income statement.
(Source: www.accountingcoach.com/online-accounting-course/27Xpg04.html#lower-cost-market-inventory, Explanation of the topic; Applying Lower of Cost or Market to...If you want to get a full essay, order it on our website: Orderessay
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