Textbook Notes (369,137)
Amy Shuh (6)
Chapter 6

# Chapter 6A - Inventory Cost Formulas in Periodic Systems.docx

2 Pages
62 Views

Department
Course Code
Professor
Amy Shuh

This preview shows 80% of the first page. Sign up to view the full 2 pages of the document.
Description
Chapter 6A Inventory Cost Formulas in Periodic Systems October 2, 2013 Michael Hua  In the periodic inventory system, we ignore the different dates of each of the sales  We make the allocation at the end of a period and assume the entire pool of costs is available for allocation at that time  Beginning Inventory + Cost of Goods Purchased = COGAFS – Ending Inventory = COGS  In a periodic inventory system, the cost formulas are applied to the ending inventory, which is then deducted from the cost of goods available for sale to calculate the cost of goods sold Periodic System – First-In, First-Out (FIFO)  The cost of the most recent purchases is assumed to remain in ending inventory  Once the cost of the ending inventory is determined, the COGS is calculated by subtracting the ending inventory (the cost of the units not sold) from the cost of all good available for sale (pool of costs)  The cost of goods sold amounts should be separately calculated and proven in assignments  The results under FIFO in a periodic inventory system are the same as in a perpetual inventory system  Under both inventory systems, the first costs in are the ones assigned to cost of goods sold Periodic System – Average  Weighted average cost is calculated the same as perpetual: dividing the COGAFS by the units available for sale  The difference between the two cost formulas is that this calculation is done after each purch
More Less

Only 80% of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document

Unlock to view full version

Unlock Document
Me

OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Join to view

OR

By registering, I agree to the Terms and Privacy Policies
Just a few more details

So we can recommend you notes for your school.