ACCT 203 Lecture 3: Class note 3

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brownduck883

25 May 2018

School

George Mason University

Department

Accounting

Course

ACCT 203

Professor

Harley

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Class note 3

Inventory

Items a company intends for sale to customers

Fifo (First in, First out)

Inventory costing method that assumes that the FIRST units purchased are the

FIRST ones sold

Lifo (Last in, First out)

Inventory costing method that assumes the LAST units purchased are the FIRST

ones sold

Weighted Average Cost

Inventory costing method that assumes both cost of goods sold & ending

inventory consist of a random mixture of all the goods available for sale

Freight Charges

Includes the cost of shipments of inventory from suppliers, as well as the cost of

shipments to customers

Purchase Discount

Allow buyers to trim a portion of the cost of the purchase in exchange for

payment within a certain period of time. Encourage prompt payment.

Inventory Turnover Ratio

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Document Summary

Items a company intends for sale to customers. Inventory costing method that assumes that the first units purchased are the. Inventory costing method that assumes the last units purchased are the first ones sold. Inventory costing method that assumes both cost of goods sold & ending inventory consist of a random mixture of all the goods available for sale. Includes the cost of shipments of inventory from suppliers, as well as the cost of shipments to customers. Allow buyers to trim a portion of the cost of the purchase in exchange for payment within a certain period of time. Shows the number of times the firm sells its average inventory balance during a reporting period. Inventory turn over ratio = cost of goods sold / avg. Indicates the approximate number of days the average inventory is held. Days in inventory = 365 / inventory turnover ratio.

Related Questions

Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for portable DVD players are as follows: Apr. 1 Inventory 36 units @ $45 10 Sale 30 units 15 Purchase 17 units @ $47 20 Sale 12 units 24 Sale 8 units 30 Purchase 40 units @ $49 The business maintains a perpetual inventory system, costing by the first-in, first-out method. Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. a. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column. Cost of the Merchandise Sold Schedule First-in, First-out Method Portable DVD Players Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Merchandise Sold Unit Cost Cost of Merchandise Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Apr. 1 $ $ Apr. 10 $ $ Apr. 15 $ $ Apr. 20 Apr. 24 Apr. 30 Apr. 30 Balances $ $ b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Perpetual Inventory Using FIFO

Beginning inventory, purchases, and sales data for portable DVD players are as follows:

Apr. 1	Inventory	36 units @ $45
10	Sale	30 units
15	Purchase	17 units @ $47
20	Sale	12 units
24	Sale	8 units
30	Purchase	40 units @ $49

The business maintains a perpetual inventory system, costing by the first-in, first-out method.

Determine the cost of the merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3.

a. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Merchandise Sold Unit Cost column and in the Inventory Unit Cost column.

Cost of the Merchandise Sold Schedule
First-in, First-out Method
Portable DVD Players
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Apr. 1								$	$
Apr. 10					$	$
Apr. 15		$	$

Apr. 20

Apr. 24
Apr. 30

Apr. 30	Balances					$			$

b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales data for portable DVDplayers are as follows:

June 1	Inventory	46 units @ $45
6	Sale	39 units
14	Purchase	58 units @ $48
19	Sale	32 units
25	Sale	9 units
30	Purchase	24 units @ $51

The business maintains a perpetual inventory system, costing bythe last-in, first-out method.

Determine the cost of merchandise sold for each sale and theinventory balance after each sale, presenting the data in the formillustrated in Exhibit 4.

Hide

Under LIFO, if units are in inventory at two different costs,enter the units with the HIGHER unit cost first in the Cost ofMerchandise Sold Unit Cost column and LOWER unit cost first in theInventory Unit Cost column.

Schedule of Cost of Merchandise Sold

LIFO Method

Portable DVD Players

Date

Quantity Purchased

Purchases Unit Cost

Purchases Total Cost

Quantity Sold

Cost of Merchandise Sold Unit Cost

Cost of Merchandise Sold Total Cost

Inventory Quantity

Inventory Unit Cost

Inventory Total Cost

June 1

$ 45

$ 2,070

June 6

June 14

June 19

June 25

June 30

Balance

mauvedog591

I need help figuring out how to add the cost of goods sold andcost of ending inventory given the following information.

Inventory Costing:

LIFO Bordeaux Company has the following information related topurchases and sales of one of its inventory items: Date DescriptionUnits Purchased at Cost Units Sold at Retail

June 1 Beginning Inventory 150 units @ $11 = $1,650

9 Purchase 1 200 units @ $12 = $2,400

14 Sale 1 300 units @ $25

22 Purchase 2 250 units @ $14 = $3,500

29 Sale 2 225 units @ $25

Assume that Bordeaux Company uses a perpetual inventorysystem.

Required:

Calculate the cost of goods sold and the cost of endinginventory using the LIFO inventory costing method.

Cost of goods sold $

Cost of ending inventory $

ivorybutterfly259

ACCT 203 Lecture 3: Class note 3

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