The bridal gift shop company has 12 units in ending merchandise inventory on december 31. the units were purchased in november forâ $150 each. the price lists from suppliers indicate the current replacement cost of the item to beâ $152 each. what would be the amount reported as merchandise inventory on the balanceâ sheet?

$1,800

Explanation:

According to the accounting principle, the inventory should be valued at lower of cost or net realizable value. The calculation is shown below:

Based on acquisition cost

12 units × $150 = $1,800

Ending inventory = $1,800

Based on current replacement cost

12 units × $152 = $1,824

Ending inventory = $1,824

As we see that the lower cost would be $1,800. So, $1,800 would be reported to the ending inventory

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

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