CHAPTER 6 Reporting and Analyzing Inventory Study Objectives 1. Describe the steps in determining inventory quantities. 2. Explain the basis of accounting for inventories and apply the inventory cost flow methods under a periodic inventory system. 3. Explain the financial statement and tax effects of each of the inventory cost flow assumptions. 4. Explain the lower of cost or market basis of accounting for inventories. 5. Compute and interpret the inventory turnover ratio. 6. Describe the
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CHAPTER 9 Inventories: Additional Valuation Issues ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Concepts for Analysis Exercises Problems 1, 2, 3, 9, 10 1, 2, 3, 5 6 1. Lower-of-cost-or-market. 1, 2, 3, 4, 5, 6 1, 2, 3 1, 2, 3, 4, 5, 6 2. Inventory accounting changes; relative sales value method; net realizable value. 7, 8 4 7, 8 3. Purchase commitments. 9 5, 6 9, 10 9 4. Gross profit method.
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periodic inventory systems compared ( LO8-1 Text: E 8-4 The following information is available for the Kleinschmidt Corporation for 2013: Beginning inventory $112,000 Merchandise purchases (on account) 265,000 Freight charges on purchases (on account) 16,000 Merchandise returned to supplier (for credit) 6,000 Ending inventory 123,000 Sales (on account) 350,000 Cost of merchandise sold 264,000 Required: Applying both a perpetual and a periodic inventory system
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CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Inventory accounts; determining quantities, costs, and items to be included in inventory; the inventory equation; balance sheet disclosure. Perpetual vs. periodic. Recording of discounts. Inventory errors. Flow assumptions. 10, 11 7 12, 13, 16, 18, 20 4 5, 6, 7 Questions 1, 2, 3, 4, 5, 6, 8, 9 Brief Exercises 1, 3 Exercises 1, 2, 3, 4, 5, 6, 10 Problems 1, 2, 3 Concepts for Analysis 1
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CH.8 -Inventory Classification: * Merchandise inventory- only inventory account that appears in the financial statements. -Perpetual inventory system- continuously tracks changes in the Inventory account. Records all purchases and sales of goods directly in the Inventory account as they occur. * Perpetual inventory overages and shortages generally represent a misstatement of cost of goods sold. Debi t Inventory over or short, credit Inventory. -Periodic inventory system- records all
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1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? (Points: 1) [pic]standard [pic]actual [pic]process [pic]job order 2. Process costing is used in companies that _______. (Points: 1) [pic]engage in road and bridge construction [pic]produce sailboats made to customer specifications [pic]produce bricks for sale to the public [pic]construct houses according to customer
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Business Inventory Control Meghan Farrar, Amanda May, Nancy Dinges, Scott Moore and Bianca Holmes American Public University Introduction “Inventory is one of the most expensive and important assets to many companies, representing as much as 50% of total invested capital. Managers have long recognized that good inventory control is crucial” (Render et al, 2011). Therefore, it is really no surprise that companies place such a high importance on inventory control. An analysis
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INCORPORATING WIRELESS INVENTORY SCANNERS THROUGHOUT WAREHOUSE Prepared for Professor April 5, 2014 Letter of Transmittal Board Members 1234 Martin Luther King Dr. Killeen, TX 76543 USA Dear Members of the Board and Fellow Employees: Here is my report, highlighting the recommendations that should implement a wireless inventory scanning process throughout our warehouse. This report provides detailed information regarding the significant impact that this wireless network
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Financial flexibility– the ability to use its financial resources to adapt to change. Liquidity- the availability of a company’s liquid assets to pay its bills. Cash- the resource on hand to meet planned payments and emergency situations. (current assets includes coins, currency, unrestricted funds on deposit with a bank, negotiable checks, and bank drafts) Cash equivalents- short term highly liquid investments that are readily convertible into known amounts of cash. Cash planning systems- methods
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Chapter 4 Exercise 4-3 a. Describe inventory cost flow assumption of (1) average cost, (2) FIFO, (3) LIF0. Average cost: units sold without regard to the order in which they are purchased and computes COGS and ending inventories as simple weighted average. FIFO: the first units purchased are the first units sold. These units are the units on hand at the beginning of the period. LIFO: the last units purchased are the first to be sold. b. Discuss management’s usual reason for using LIFO as inflationary
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