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 Ending Inventory on the re-stated Balance Sheet which will be acceptable under both US GAAP and International IFRS, at September 30?

Sep. 1         Inventory 22 units at $22

         4        Sold 11 units

       10        Purchased 31 units at $28

       17        Sold 28 units

      30        Purchased 10 units at $32

Answer 1

FIFO method is accepted both under GAAP and IFRS

Calculation of ending inventory using FIFO Method at September 30
			$
Date	Particulars	Units	Cost per unit	Total
1-Sep	Beginning inventory	22	22	484
4-Sep	Sold	(11)	22	(242)
10-Sep	Purchases	31	28	868
17-Sep	Sold	(28)		(718)	Note 1
30-Sep	Purchases	10	32	320
	Ending Inventory	24		712
Note 1
(11*22) + (17*28)
Balance in inventory on 17 Sep
Balance from 1 Sep (22-11)	11	22
Purchases on 10 Sep	31	28