ACCO 230 Lecture 6: MaterialRvw S6

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purpleferret538

26 Oct 2016

School

Concordia University

Department

Accountancy

Course

ACCO 230

Professor

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Document Summary

Inventory methods: lifo last in first out. Assumes last (most recent) unit of inventory to arrive is the first to be sold. When inventory prices are rising, this method yields the highest cogs. Cogs more closely represents the current cost of inventory: fifo first in first out. Assumes first unit to arrive is the first one to be sold. When inventory prices are rising, this method yields the lowest cogs: weighted average. Assumes all items are of equal value. Average cost of next unit is equal to the total cost paid divided by total units : specific id. Usually used for large or custom items. Examples: planes, cars, cruise ship cabins, houses. Perpetual inventory system: tracks items at every sale so inventory records are up to date at all times, journal entry upon sale: Periodic inventory system: tracks items for each period, journal entry upon sale:

Related Questions

Jill Hansen owns Interior Designs, a furniture store. One of hermost popular items is a leather recliner.

Following is the recliner inventory activity for August. Therecliners on hand at August 1 had a unit cost of $280.

Date	purchases	sales	units on hand
8/1	Balance fwd.		80
8/4	120 units @ $300		200
8/20		140 units @ $510	60
8/25	180 units @ $340		240
8/29		110 units @ $590	13

If Interior Designs uses the first-in, first-out (FIFO)inventory method and periodic approach, what values would beassigned to ending inventory, cost of goods sold and grossprofit?

If Interior Designs uses the last-in, first-out (LIFO)inventory method and periodic approach, what values would beassigned to ending inventory, cost of goods sold and grossprofit?

If Interior Designs uses the weighted-average inventorymethod and periodic approach, what values would be assigned toending inventory, cost of goods sold and gross profit?

silverkangaroo662

Jill Hansen owns Interior Designs, a furniture store. One of hermost popular items is a leather recliner.

Following is the recliner inventory activity forAugust. The recliners on hand at August 1 had a unit cost of$280.

Date	purchases	sales	units on hand
8/1	Balance fwd.		80
8/4	120 units @ $300		200
8/20		140 units @ $510	60
8/25	180 units @ $340		240
8/29		110 units @ $590	13

IfInterior Designs uses the first-in, first-out (FIFO) inventorymethod and periodic approach, what values would be assigned toending inventory, cost of goods sold and gross profit?

If Interior Designs uses the last-in, first-out (LIFO)inventory method and periodic approach, what values would beassigned to ending inventory, cost of goods sold and grossprofit?

If Interior Designs uses the weighted-average inventorymethod and periodic approach, what values would be assigned toending inventory, cost of goods sold and gross profit?

raspberrysea-lion870

During the year, TRC Corporation has the following inventory transactions:

Date	Transactions	Number of Units	Unit Cost	Total Cost
Jan. 1	Beginning Inventory	42	$34	$1,428
Apr. 7	Purchase	122	$36	$4,392
Jul. 16	Purchase	192	$39	$7,488
Oct 6.	Purchase	102	$40	$4,080
Total		458		$17,388

For the entire year, the company sells 411 units of inventory for $52 each.

Calculate ending inventory, cost of goods sold, sales revenue and gross profit according to:

1. FIFO method

2. LIFO method

3. Weighted Average method

Also, determine which method will result in higher profitability when inventory costs are rising?

coralfrog788

ACCO 230 Lecture 6: MaterialRvw S6

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