68. Suppose that David adopted the last-in first-out (LIFO) inventory-flow method for his business inventory of widgets (purchase prices below). Widget Purchase Date Direct Cost Other Costs Total Cost #1 August 15 $ 2,100 $ 100 $ 2,200 #2 October 30 $ 2,200 $ 150 $ 2,350 #3 November 10 $ 2,300 $ 100 $ 2,400 In late December, David sold widget #2 and next year David expects to purchase three more widgets at the following estimated prices: Widget Purchase Date Estimated Cost #4
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We evaluate their financial condition each reporting period by focusing primarily on cash provided by operating activities, their current ratio, the turnover rate of our accounts receivable and inventories, the amount and reasons for changes in cash used in investing activities, the amount and reasons for changes in cash provided by financing activities and our cash and cash equivalents and short-term investments position at period end. their conservative financial practices have served us well in
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Week 6 Individual Estimating Inventory and Preparing Multiple-Step and Single-Step Income Statements Assignment Guidelines: Problem 5-4A **Please see assignment in text on pg. 212 for complete directions. 1. Compute the company’s net sales for the year. 2. Compute the company’s total cost of merchandise purchased for the year. 3. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses. 4. Prepare
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CHAPTER 2 Accounting for Materials Review Summary 1. Materials control includes physical control of materials and control over the investment in materials. Effective physical control of materials involves limiting the access to stored materials, segregating the duties of employees who handle materials and materials reports, and establishing an accurate recording system for materials purchases and issues. Only authorized personnel should be permitted in material storage areas, and procedures
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accordingly. Revenue Recognition, extraordinary items, receivables, inventory, long-lived assets, and debt and equity would all have to be altered when switching between the two. For example, LIFO inventory valuation is not permitted under IFRS. Because of this, a company would have to recalculate under the FIFO method as well as adjust COGS and tax expenses. 2. Which method best reflects the economic reality? For investors, IFRS may present more approachable and comprehensive financial statements
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is based on the average cost of items available for sale during a period. 3) Perpetual method is the most accurate and is widely used. With this method inventory is kept count at all times. 4) FIFO or first-in, first-out, use the cost of beginning inventory or oldest inventory to base calculations on. 5) LIFO or last-in, first-out bases the calculation of cost of the item on the last item purchased. This method is often used to cut tax cost assuming the last item bought was more costly. Many items
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1362-6(2)(ii)(B)? D. Whether an S corporation can keep its C corporation tax year, which ends in June 30, without documenting any business purpose, under the provision of section 1378(b)? E. Whether a newly elected S corporation has to recapture LIFO amount in inventory, according to section 1363(d), to the extent of how much? F. Whether a newly elected S corporation shall recognize the built-in gain from the sale of the appreciated land under section 1374(b)(2), to the extent of how much? G
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Accounting Memp Interforoffice Memo TO: ACCOUNTING TEAM MATE FROM: ANDREW ACCOUNTANT SUBJECT: LIFO FIFO EXPLANATION DATE: 2/24/2015 Occasionally an individual who works at a company in a certain department is required to pass on information to another department or a supervisor. It is necessary to make this memo accurate and professional since information on inventory valuations has been requested by the executive vice president. To be considered that they are not aware of the jargon
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Whenever an individual is in any type of a leadership role with their employer, it will be necessary to communicate with other department managers and possibly even upper level management. In this scenario, the boss has requested an overview of LIFO versus FIFO as it would apply to their company. The memo that will be submitted to the boss must be professional. The figures presented in the memo should be as precise as possible so that company officials will not be misled. The use of jargon in a memo
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2014). What are the differences between U.S. GAAP and IFRS? U.S. GAAP allows numerous ways, such as retail method, to determine the cost of inventory. The three simple and most popular methods used include: 1) first-in, first-out (FIFO), 2) last-in, first-out (LIFO), and weighted average (Gray & Ehoff Jr., 2014). Once the cost is evaluated, the LCM rule is applied to the result to decide the monetary value to be stated in the financial reports. The LCM reflects a “conservative approach” by stating
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