ACC 100 Final: Post Midterm Review - FINALS Review

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danotehustla

5 Dec 2016

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Knowing the cost of inventory is extremely important for decision making, changing suppliers, using different shipping companies, reducing other operating expenses to allow for similar profitability in the business overall. Perpetual inventory system does not track individual prices for inventory needed for good decision making. Assign costs to each unit of inventory. Determine the cost of goods sold (because inventory costs are transferred moved over to cogs when inventory is sold to customers) Three methods (cars for all three methods to show difference: specific identification. The cost of every single item of inventory is calculated and the item is tagged with the cost. That means that, at any time, the cost of every single item of inventory can be determined. Inventory -12,000, cogs -12,000, rev cogs = gp: gp / sales revenue = gross profit margin (40%, ending inventory on balance sheet = ,000. Homogenous items are items that are not unique, all the same .

Related Questions

Smiller Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2010, the accounting records for the most popular item in inventory showed the following:

Required:

Compute the cost of goods available for sale (a), cost of ending inventory (b), cost of goods sold (c) at December 31, 2010, under each of the following inventory costing methods. (show solutions and round to the nearest dollar)

1. Weighted average cost

2. First-in, first-out

3. Last-in, first-out

4. Specific identification, assuming that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of February 20, 2010. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of June 30, 2010.

greytortoise508

Background Information:

Transactions Units Unit Cost
Beginning inventory, January 1, 2009 1,800 $5.00
Transactions during 2009:
a. Purchase, January 30 2,500 6.20
b. Sale, March 14 ($10 each) (1,450 )
c. Purchase, May 1 1,200 8.00
d. Sale, August 31 ($10 each) (1,900 )

Problem:
Compute the amount of goods available for sale, ending inventory,and cost of goods sold at December 31, 2009, under each of thefollowing inventory costing methods. For Specific Identification,assume that the March 14, 2009, sale was selected two-fifths fromthe beginning inventory and three-fifths from the purchase ofJanuary 30, 2009. And that the sale of August 31, 2009, wasselected from the remainder of the beginning inventory, with thebalance from the purchase of May 1, 2009. (Do not round Weightedaverage cost per unit. Round your final answers to the nearestdollar amount.)

Goods available for sale Ending inventory Cost of goods sold
a. Last-in, first-out. $34,100 $11,170 $22,930
b. Weighted average cost. $34,100 $13,330 $20,770
c. First-in, first-out. $34,100 $15,490 $18,610
d. Specific identification. $34,100 ? ?

Definition:

Specific Identification - The inventory costing method thatidentifies the cost of the specific item that was sold.

I just need help with the specific identification part, I didall the other parts and got them right but I am confused with thewording on the specific information part.

If any one could explain it to me and show me how to do thisproblem then I will award them lifesaver points/karma

taupesardine251

PA7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System [LO 7-3]

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Transactions		Units			Unit Cost
Beginning inventory, January 1			1,600		$	45
Transactions during the year:
a.	Purchase, January 30		2,300			49
b.	Sale, March 14 ($100 each)		(1,250	)
c.	Purchase, May 1		1,000			75
d.	Sale, August 31 ($100 each)		(1,500	)

Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Required:
1.	Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

2-a.

Of the four methods, which will result in the highest gross profit?

	Last-in, first-out
	Weighted average cost
	First-in, first-out
	Specific identification

2-b.

Of the four methods, which will result in the lowest income taxes?

	Last-in, first-out
	Weighted average cost
	First-in, first-out
	Specific identification

coffeeduck922

ACC 100 Final: Post Midterm Review - FINALS Review

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