Unit 10 - cob.jmu.edu

Unit 10 - cob.jmu.edu

Unit 12 September 30, 2019 Inventory Costing Purchase of Inventory DATE or ID 1-Jan Inventory Accounts Payable (to record purchase of inventory) $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 DEBIT

CREDIT 1,000 1,000 Sale of Inventory DATE or ID 20-Jan DEBIT CREDIT Accounts Receivable Revenue 750 Cost of Goods Sold Inventory 300 750 300 (to record the sale of 3 units of inventory) $100 $100 $100 $100

$100 $100 $100 $100 $100 $100 Customer buys 3 units at $250 each on account. Purchase More Inventory $104 $104 $104 $104 DATE or ID 1-Feb Inventory Accounts Payable (to record the purcahse of inventory) $104 $104 $104

$104 $104 $104 $100 $100 $100 $100 $100 $100 $100 DEBIT CREDIT 1,040 1,040 Sale of Inventory $104 $104 14-Feb $104 $104

$104 $104 $104 $104 $104 $104 DATE or ID DEBIT Accounts Receivable Revenue Cost of Goods Sold Inventory CREDIT 750 750 ??? (to record the sale of 3 units of inventory) $100 $100 $100

$100 $100 $100 $100 Another customer buys 3 units at $250 each on account. ??? Four Inventory Costing Methods $104 $104 $104 $104 Specific Identity $104 $104 FIFO (first in, first out) $104 $104 $104 $104 LIFO (last in, first out)

Weighted Average $100 $100 $100 $100 $100 $100 $100 Four Inventory Costing Methods $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $100

$100 $100 $100 $100 $100 $100 Specific Identity Four Inventory Costing Methods $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $100 $100

$100 $100 $100 $100 $100 Specific Identity Four Inventory Costing Methods $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $100 $100

$100 $100 $100 $100 $100 Specific Identity Four Inventory Costing Methods $104 $104 $104 $104 Specific Identity DATE or ID $104 $104 CREDIT $104 14-Feb $104

DEBIT $104 $104 $100 $100 $100 $100 $100 $100 $100 ENDING INVENTORY: $1,436 Accounts Receivable Revenue 750 Cost of Goods Sold Inventory 304 (to record the sale of 3 units of inventory) 750 304 Four Inventory Costing Methods $104

$104 $104 $104 $104 $104 $104 $104 $104 $104 $100 $100 $100 $100 $100 $100 $100 Four Inventory Costing Methods FIFO (first in, first out) LIFO (last in, first out) Weighted Average

Inventory Physical Movement $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $100 $100 $100 $100 $100 $100 $100 First-In, First-Out $104

$104 $104 $104 $104 $104 $104 $104 $104 $104 $100 $100 $100 $100 $100 $100 $100 First-In, First-Out $104 $104

$104 $104 $104 $104 $104 $104 FIFO (first in, first out) DATE or ID $104 $104 $100 $100 $100 $100 $100 $100 $100 ENDING INVENTORY: $1,440 14-Feb

DEBIT CREDIT Accounts Receivable Revenue 750 Cost of Goods Sold Inventory 300 (to record the sale of 3 units of inventory) 750 300 Last-in, First-Out LIFO (last in, first out) Last-in, First-Out $104 $104 $104 $104 $104 $104 $104

$104 $104 LIFO (last in, first out) DATE or ID $104 14-Feb $100 $100 $100 $100 $100 $100 ENDING INVENTORY: $1,428 CREDIT Accounts Receivable Revenue 750 Cost of Goods Sold

Inventory 312 (to record the sale of 3 units of inventory) $100 DEBIT 750 312 Last-in, First-Out $107 $107 $107 LIFO (last in, first out) $107 $104 DATE or ID $104 $104 $104 $104 $104 $104

$100 $100 $100 $100 $100 $100 $100 16-Feb Inventory Accounts Payable DEBIT CREDIT 428 428 Last-in, First-Out $107 $107 $107 DATE or ID $104 $104

LIFO (last in, first out) $107 $104 $104 $104 $104 $104 19-Feb Accounts Receivable Revenue Cost of Goods Sold Inventory $100 $100 $100 $100 $100 $100 $100 ENDING INVENTORY: $1,324 A customer buys 5 units at $250 each on account.

DEBIT CREDIT 1250 1250 532 532 Four Inventory Costing Methods Weighted Average Four Inventory Costing Methods Weighted Average Four Inventory Costing Methods Weighted Average $104 $104 $104 $104 $104 $104 7 x $100 each = $700

$104 $104 10 x $104 each = $1040 $104 $104 = $1740 TOTAL $100 $100 $100 $100 $100 $100 $100 $1740 / 17 =

$102.35 Four Inventory Costing Methods Weighted Average $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35

$102.35 7 x $100 each = $700 10 x $104 each = $1040 = $1740 TOTAL $1740 / 17 = $102.35 Four Inventory Costing Methods Weighted Average DATE or ID 14-Feb $102.35

$102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 ENDING INVENTORY: $1,433 DEBIT

CREDIT Accounts Receivable Revenue 750 Cost of Goods Sold Inventory 307 (to record the sale of 3 units of inventory) 750 307 Four Inventory Costing Methods Weighted Average $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35 $102.35

$102.35 $102.35 $102.35 $102.35 $102.35 ENDING INVENTORY: $1,433 Four Inventory Costing Methods $107 Weighted Average $107 $107 $102.35 $102.35 $102.35 $102.35 $102.35 $107 $102.35 $102.35 $102.35

$107 $102.35 $102.35 $102.35 $107 $102.35 $102.35 $102.35 $107 $107 PURCHASE: $856 ENDING INVENTORY: $1,433 14 x $102.35 each 8 x $107 each TOTAL $2289 / 22 =

$1433 = $856 = $2289 = $104 Four Inventory Costing Methods Weighted Average $104 $104 $104 $104 $104 $104 $104 $104 $104 $104

$104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 $104 ENDING INVENTORY: $2,289 14 x $102.35 each 8 x $107 each TOTAL $2289 / 22

= $1433 = $856 = $2289 = $104 Four Inventory Costing Methods Why does it matter? Specific Identity FIFO (first in, first out) LIFO (last in, first out) Weighted Average Under GAAP, companies have the flexibility to choose which costing method to use, regardless of how they handle the physical flow of goods. BB + Beginning Balance + EB

TI Purchases = Cost of Goods Sold TO Ending Balance $100 $104 $107 FIFO (first in, first out) $100 $211 BB + Beginning Balance + EB TI Purchases = Cost of

Goods Sold TO Ending Balance $100 $104 $107 FIFO (first in, first out) $100 $211 LIFO (last in, first out) $107 $204 BB + Beginning Balance + EB TI Purchases = Cost of Goods Sold

EXPENSE TO Ending Balance ASSET $100 $104 $107 FIFO (first in, first out) $100 $211 LIFO (last in, first out) $107 $204 $103.7 $207.3 Weighted Average Four Inventory Costing Methods Most accurate, but most trouble, perhaps impossible Specific Identity Highest net income during inflationary times, highest ending inventory value Requires Layers

FIFO (first in, first out) Lowest net income during inflationary times, lowest ending inventory value Requires Layers Practical for commodity goods, requires recalculating per-unit cost at every purchase. LIFO (last in, first out) Weighted Average Under GAAP, companies have the flexibility to choose which costing method to use, regardless of how they handle the physical flow of goods. CONSISTENCY PRINCIPLE Once an inventory costing method is chosen, the company must stick with it. Any change from one method to another is considered a major accounting change, must be justified, and may require reissuance of prior periods statements FULL DISCLOSURE Companies must report which costing method theyve used EVERY TIME a Balance Sheet and/or Income Statement is issued. Disclosure notes CONSERVATISM PRINCIPLE Inventory should be valued at the lower of cost or market assuming the lower market price is deemed to be long-term.

Market Price is considered to be replacement cost for the inventory. Homework Assignments 10, 11, 12 Complete by Wednesday!

Recently Viewed Presentations

  • 슬라이드 1 - Korea University

    슬라이드 1 - Korea University

    Use F. o. to control the parameters in the editing operationsOur system synthesizes a progressively-variant texture T. o using two texton masks, M i and M o, and known texture T. i As an application of image analogies [Hertzmann et...
  • Battles of World War II

    Battles of World War II

    Hiroshima was bombed first and then three days later Nagasaki would be bombed. ... - One of Germany's most respected military leaders of WW II - Successfully commanded N. African campaign until El Alamein ... Last modified by:
  • OSR Leadership Forum David Paul - Executive Director

    OSR Leadership Forum David Paul - Executive Director

    Jennifer Teixeira - Director of Research Administration. What are the different roles within the Office of Sponsored Research? Executive Director. OSR Business Units. PROPOSAL. Review. ... Thompson, Samantha ...
  • Indirect Measurement: Using a Hypsometer

    Indirect Measurement: Using a Hypsometer

    Use the following formula to calculate the value of QR: Calculate the height of the object (RG) by adding DH and QR. Please respond to the following questions in complete sentences . Share your responses with me as a Google...
  • INNATE AND LEARNED BEHAVIOUR Option E.3 IB Biology

    INNATE AND LEARNED BEHAVIOUR Option E.3 IB Biology

    J WERBA - IB BIOLOGY. Sample questions. Q1 . Suggest an experimental . DESIGN. that could be used to investigate either taxis or kinesis in an invertebrate. [3] Q2 . OUTLINE. Pavlov's experiments into conditioning in dogs. [2] Q3 ....
  • Programming with App - Toronto District School Board

    Programming with App - Toronto District School Board

    The data can be save either online or on your device's local memory (SIM card). The two objects provided are called the tinyDBand tinyWebDB. The tinyDB is listed among the objects in the BasicPalette . But no matter how you...
  • OCB3 Revision Instructions - E1H

    OCB3 Revision Instructions - E1H

    Transition to context for Quote #2. Blended Sentence (T.C.S. lead-in to Quote #2 w/MLA citation) Analysis of Quote #2 - explain effect on audience AND connect to speaker's claim. Concluding Statement (transition?) Body Paragraph 2.
  • Chapter 8: Reading Graphics and Technical Writing

    Chapter 8: Reading Graphics and Technical Writing

    Types of Graphs LINEAR GRAPHS: points are plotted along a vertical and a horizontal axis and then connected to form a line. (Figure 9-4) Used to present lots of detailed information Display positive, inverse, or independent. relationships. (Figure 9-5) Types...