F3

Question 1

What happens with a mandatory buyback of inventory

Answer 1

Financing arrangement where seller is required to repurchase goods from the buyer. If so, the seller should include the goods in inventory the entire time even when title is given

Question 2

How are metals and farm products valued on BS?

Answer 2

NRV. They don’t have a cost assigned

Question 3

What is the specific identification method?

Answer 3

unique cost assigned to each item in inventory

Question 4

Price Index (for dollar value method) =

Answer 4

End. Inventory at CY cost /
End. inventory at base year cost
If index > 1 then prices are rising

Question 5

What is a firm purchase commitment?

Answer 5

A forward contract, legally enforceable agreement to purchase a specified amount of goods at a time in the future

Question 6

Lower of cost or MARKET. What is comprised and formulas for market value

Answer 6

Middle value of-
Replacement cost: usually stated
market ceiling: = to NRV. Selling price - selling costs (sometimes referred to as disposal costs

Question 7

Capitalization of interest period begins when…

Answer 7

1. expenditures for asset have begun
2. activities that are necessary to get asset to intended use are in progress
3. interest cost is being incurred

Question 8

Depletion Base =

Answer 8

purchase price + development costs + estimated restoration costs - salvage value

Question 9

Formula to determine cost of intangible acquired from a different company

Answer 9

cash paid + PV of liabilities + FMV of stock

Question 10

when testing a finite intangible for impairment, use

Answer 10

undiscounted future cash flows for determining the impairment.
and use FV for amount of impairment