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Lecture 4

# COMMERCE 1AA3 Lecture 4: Chapter 5 - Lecture 4

Department
Commerce
Course Code
COMMERCE 1AA3
Professor
Lecture
4

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Monday, October 30, 2017
Chapter 5 - Lecture 4
Questions!
-Example Question (Slide 40): ABC Inc. began 2006 with \$44,000 of inventory.
The cost of beginning inventory (BI) is composed of 8,000 units purchased for
\$5.5 each. Merchandise transactions during 2006 were as follows:
"Beginning Inv. " " 8,000 units @ \$5.50 each!
"COGAFS = beginning inv. + purchases!
"" = 8,000 x \$5.50 + 2,000 x 12 + 6,000 x 14 + 6,000 x 15 = \$242,000!
"Units available for sale = units in beginning inventory + purchased units!
"""" = 8,000 + 2,000 + 6,000 = 22,000 units!
"Units sold = 4,000 + 3,000 + 6,000 = 13,000 units!
"Units in ending inventory = units available for sale - units sold = 22,000 - 13,000!
""""""""" = 9,000 units!
"FIFO Periodic: FIFO Perpetual always yields the same results as FIFO ! !
!Periodic!
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