Your Perfect Assignment is Just a Click Away

We Write Custom Academic Papers

100% Original, Plagiarism Free, Customized to your instructions!

glass
pen
clip
papers
heaphones

Optiplex Corporation: Differences Between GAAP and IFRS

Optiplex Corporation: Differences Between GAAP and IFRS

Assignment Instructions

Respond to the following questions. Theproblems should be solved on the basis of IFRS unless otherwise stated.

Chapter 4 Question

As a result of a downturn in the economy, Optiplex Corporation hasexcess productive capacity. On January 1, Year 3, Optiplex signed aspecial order contract to manufacture custom-design generators for a newcustomer. The customer requests that the generators be ready for pickupby June 15, Year 3, and guarantees it will take possession of thegenerators by July 15, Year 3. Optiplex incurred the following directcosts related to the custom-design generators:

Direct Costs for Custom-Design Generators
Item Cost
Cost to complete the design of the generators $3,000
Purchase price for materials and parts $80,000
Transportation cost to get materials and parts to manufacturing facility $2,000
Direct labor (10,000 labor hours at $12 per hour) $120,000
Cost to store finished product (from June 15 to June 30) $2,000

Because of the company’s inexperience in manufacturing generatorsof this design, the cost of materials and parts included an abnormalamount of waste totaling 5,000 dollars. In addition to direct costs,Optiplex applies variable and fixed overhead to inventory usingpredetermined rates. The variable overhead rate is 2 dollars per directlabor hour. The fixed overhead rate based on a normal level ofproduction is 6 dollars per direct labor hour. Given the decreased levelof production expected in Year 3, Optiplex estimates a fixed overheadapplication rate of 9 dollars per direct labor hour in Year 3.

Determine the amount at which the inventory of custom-designgenerators should be reported on Optiplex Corporation’s June 30, Year 3,balance sheet.

Chapter 5 Question

SC Masterpiece Inc. granted 1,000 stock options to certain salesemployees on January 1, Year 1. The options vest at the end of 3 years(cliff vesting) but are conditional upon selling 20,000 cases ofbarbecue sauce over the 3-year service period. The grant-date fair valueof each option is 30 dollars. No forfeitures are expected to occur. Thecompany is expensing the cost of the options on a straight-line basisover the 3-year period at 10,000 dollars per year (1,000 options X $30divided by 3 = $10,000). On January 1, Year 2, the company’s managementbelieves the original sales target of 20,000 units will not be metbecause only 5,000 cases were sold in Year 1. Management modifies thesales target for the options to vest to 15,000 units, which it believesis reasonably achievable. The fair value of each option at January 1,Year 2, is 28 dollars.

Determine the amount to be recognized as compensation expense inYear 1, Year 2, and Year 3 under (a) IFRS and (b) U.S. GAAP. Prepare thenecessary journal entries.

Submission Requirements

Your paper should meet the following requirements:

  • Written communication: Written communication is free of errors that detract from the overall message.
  • APA formatting: Resources and citations are formatted according to current APA style and formatting.
  • Font and font size: Times New Roman, 12 point.

Order Solution Now

Our Service Charter

1. Professional & Expert Writers: Assignment Geeks only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Assignment Geeks are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Assignment Geeks is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Assignment Geeks, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.