Barnes & Noble Corporate Accounting

The inventory cost may be received via the evaluation of the starting inventories, the finishing inventory, and the final goods costthat Barnes & Noble retailing receives after recelling. Barnes & Noble company retail manages more than 650 bookstores in retail that are operating under the Barnes & Nobles trade name (p 5). The company also has different publishing houses that give B&N additional budget. All these help to obtain the determined inventory.

How to determine the market value when doing a corporate accounting for the store inventory?

The Barnes & Noble products’ market value could be determined through the use of various methods. First, through the use of specific identification. Specific identification of the cost for magazines, books, café products and the gifts can be determined through the use of this method (p 5). Through this formula, the cost of each item is marked, coded then tagged with the specific unit cost. The method allows the cost of the inventory to have some base on the actual physical flow. The second method of determining the market value while accounting for the inventory is through the use of first-in, first-out cost flow method. This method requires one to use the cost of items that are purchased first then assigned to the cost of goods that are first sold. The method assumes that the earliest costs of the inventory that the company acquires are the first to be recognized as the cost of the sold goods.

How are inventory shortages accounted for?

When Barnes and Noble Company wants to account for the shortages, it is always necessary to record the sales first for all its sold products. The company ensures that the system has some extra entries that it can debit as the cost of goods sold and all the credits that involve the Merchandise inventory (p 5). If the firm’s principals realize a shortage from the trade books, then it is important to record the books to the Inventory shortage account and debit the stolen good.

How the Company was impacted by the FASB ASU 2015-11 “Simplifying the Measurement of Inventory?” Explain.

The FASB ASU 2015-11 assisted in the spin-off of the measurement of Inventory of Barnes & Noble education. The products were later distributed on the pro rata basis. The shares obtained during this period of the B&N education acted as the common stock to the organization (p 6). The Noble & Barnes stockholders of the record as of July 27 in 2015 was later received as a distribution of about 0.632 shares of B&N education. This acted as the common stock for all the shares that Barnes & Noble held during the recorded dates.

5. When does the Company review goodwill and other indefinite life intangible assets for impairment?

The company reviews its goodwill and the indefinite life intangible assets for the impairment through the use of the two step approach which requires the recoverability test (p 6). The principals ensure that the carry some amount of the assets by comparing the sum of the future undiscounted cash flows and later generating them through the eventual use disposition. If the impairment indicators tend to exist, the one-step approach can require the impairment loss to be calculated.

Explain the impairment test for goodwill and the results.

The impairment test for goodwill can be allocated to the reporting units by defining the US GAAP as the operating segment or even one level that is below the operating segment of components. The goodwill can be allocated to the cash-generating units by representing the lower level of goodwill that is monitored by some larger operational segments.

Explain the impairment related to publishing contracts.

The publishing contracts can be compared to the sum of the future undiscounted cash flows that are generated through the use of some eventual disposition of assets that are not recoverable during the calculation of the impairment loss. If the impairment indicator exists, then one can carry the values of the assets to some other long-living assets that are related to the publishing contract.

How did the Company evaluate long-lived assets for impairment and what were the results?

The company evaluated the long-lived assets for the Impairment through the use of various accounts of balance sheets. The first account was the account of the books and other tangible property owned by the company. The property will later be allocated to the income statement of expenses and recorded as an impairment. The second account that can be used to evaluate the long-lived assets is the investment account. The company will create the account due to the securities for other companies (p 8). The results will be allocated to the balance sheet on the expense side as a gain or loss impairment. The final account that the company will create is the goodwill account. The account is created since the company purchase goods from other companies that are later paid more than the fair value. The goods can be allocated to the income statement as the amortization or as impairment on the expense side.

How does the Company account for major repairs vs. routine maintenance?

Barnes & Noble Company accounts for major repairs and maintenance by fixing the assets that are in the operating condition. The company accounts for some of the major repairs as improvements, replacements or as additions. The major repairs represent the capital expenditures. The repairs and maintenance can only be capitalized.

What are the time periods for the Company’s inventory purchase commitments and how are they reported?

The time period for a company inventory purchase commitment is the firm’s assurance to acquire some goods or services from the supplier within a specific period of time. B&N Company for instance has a commercial agreement with Samsung relating to some tablets (p 7). The company has a purchase commitment so as to lock into a particular price. A purchase commitment if a company is important because it helps to lock the production capacity of the supplier. The purchase commitment can be reported through the use of some legal actions especially when the price points that the parties have fully agreed to diverge over the time and the market rate. This ensures that one party is placed in the disadvantaged position if it wishes to terminate the contract.

Why are there reserves for non-returnable inventory? Explain.

Reserves for the non-returnable inventory exist for Barnes & Noble since they help to determine the market basing on the estimated net of the realizable value that is the selling price in general (p 7). The reserves for the non-returnable inventory are based on the history of the company of the liquidating non-returnable inventory.

12. How does the Company account for inventory shortages?

The company account for the cost of the missing inventory by determining the difference between the costs of the inventory that is in the hand and the cost of inventory that should actually be on hand basing on the records of the company (p 4).

How does the Company account for Research and Development costs for software products?

The company accounts for Research and the Development costs of the software products by creating and improving the processes and products (p 7). The company believes that expenditure needs to be charged to the expense that is incurred.

Considering the nature of the business, what might be included in the reported land improvements?

Considering the nature of B&N Company, it is important to enhance some plots of land to ensure that the land is more usable. Various costs can be included to ensure that there is land improvement in the cost of the asset of land. The costs include the demolishing cost of some existing buildings, leveling and clearing costs of the land. The land for the company does not depreciate because it does not have a useful life. The land has a perpetual life.

15. How does the Company account for its unamortizable intangible assets?

The non-amortizable intangible assets for the company include the customer lists, the trademark and the agreements. The company accounts for the non-amortizable assets by adjusting the level of amortization and taking it into account so as to reduce the carrying amount of the asset. This also ensures that the assets have a reduced useful life.