会计学原理英文课件Chapter_06Inventories and Cost of Sales

会计学原理英文课件Chapter_06InventoriesandCostofSalesDETERMININGINVENTORYITEMSMerchandiseinventoryincludesallgoodsthatacompanyownsandholdsforsale,regardlessofwherethegoodsarelocatedwheninventoryiscounted.Itemsrequiringspecialattentioninclude:GoodsinTransitGoodsDamagedorObsoleteGoodsonConsignmentC1GOODSINTRANSITC1GOODSONCONSIGNMENTMerchandiseisincludedintheinventoryoftheconsignor,theowneroftheinventory.ConsignorConsigneeThanksforsellingmyinventoryinyourstore.C1GOODSDAMAGEDOROBSOLETEDamagedorobsoletegoodsarenotcountedininventoryiftheycannotbesold.Costshouldbereducedtonetrealizablevalueiftheycanbesold.C1DETERMININGINVENTORYCOSTSInvoiceCostIncludeallexpendituresnecessarytobringanitemtoasalableconditionandlocation.MinusDiscountsandAllowancesPlusImportDutiesPlusFreightPlusStoragePlusInsuranceC2INTERNALCONTROLSANDTAKINGAPHYSICALCOUNTMostcompaniestakeaphysicalcountofinventoryatleastonceeachyear.WhenthephysicalcountdoesnotmatchtheMerchandiseInventoryaccount,anadjustmentmustbemade.Goodinternalcontrolsovercountinclude:Pre-numberedinventorytickets.Countershavenoinventoryresponsibility.Countsconfirmexistence,amount,andqualityofinventoryitem.Secondcountistaken.Managerconfirmsallitemscounted.C2INVENTORYCOSTFLOWASSUMPTIONSCostingMethodSpecificIdentificationFIFOLIFOWeightedAverageInventorySystemPerpetualorPeriodicAccountingforinventoryrequiresseveraldecisions...P1INVENTORYCOSTFLOWASSUMPTIONSFirst-In,First-Out(FIFO)Assumescostsflowintheorderincurred.Last-In,First-Out(LIFO)Assumescostsflowinthereverseorderincurred.WeightedAverageAssumescostsflowatanaverageofthecostsavailable.P1INVENTORYCOSTINGILLUSTRATIONHereisinformationaboutthemountainbikeinventoryofTrekkingforthemonthofAugust.P1Date ActivityUnitsAcquiredatCost UnitsSoldatRetailUnitInv.Aug.1Beg.Inventory10units@$91=$910   10Aug.3Purchased15units@$106=$1,590   25Aug.14Sales      20units@$1305Aug.17Purchased20units@$115=$2,300   25Aug.28Purchased10units@$119=$1,190   35Aug.31Sales      23units@$15012  Totals55   $5,990 43              SPECIFICIDENTIFICATIONWhenunitsaresold,thespecificcostoftheunitssoldisaddedtocostofgoodssold.Trekkingsold20bikesonAugust14thwiththefollowingcosts:The23bikessoldonAugust31sthadthefollowingcosts:P18bikes@$91=$72812bikes@106=1,272Costofgoodssold=$2,0002bikes@$91=$1823bikes@106=31815bikes@115=1,7253bikes@119=357Costofgoodssold=$2,582SPECIFICIDENTIFICATIONP1IncomeStatementCostofGoodsSoldBalanceSheetInventorySPECIFICIDENTIFICATIONHerearetheentriestorecordthepurchasesandsales.Thenumbersinredaredeterminedbythecostflowassumptionused.Allpurchasesandsalesaremadeoncredit.Thesellingpriceofinventorywasasfollows:8/14$1308/31150P1FIRST-IN,FIRST-OUT(FIFO)CostofGoodsSoldEndingInventoryOldestCostsRecentCostsP1FIRST-IN,FIRST-OUT(FIFO)TheCostofGoodsSoldfortheAugust14saleis$1,970.Afterthissale,thereare5unitsininventoryat$530(5@$106)P1FIRST-IN,FIRST-OUT(FIFO)CostofGoodsSoldforAugust31=$2,600OnAugust31st,thereare12unitsininventoryat$1,420(2@$115+10@$119).P1FIRST-IN,FIRST-OUT(FIFO)Herearetheentriestorecordthepurchasesandsalesentries.Thenumbersinredaredeterminedbythecostflowassumptionused.Allpurchasesandsalesaremadeoncredit.Thesellingpriceofinventorywasasfollows:8/14$1308/31150P1LAST-IN,FIRST-OUT(LIFO)RecentCostsOldestCostsP1LAST-IN,FIRST-OUT(LIFO)TheCostofGoodsSoldfortheAugust14saleis$2,045.Afterthissale,thereare5unitsininventoryat$455(5@$91)P1LAST-IN,FIRST-OUT(LIFO)CostofGoodsSoldforAugust31=$2,685OnAugust31st,thereare12unitsininventoryat$1,260:(5@$91+,7@$115).P1LAST-IN,FIRST-OUT(LIFO)Herearetheentriestorecordthepurchasesandsalesentries.Thenumbersinredaredeterminedbythecostflowassumptionused.Allpurchasesandsalesaremadeoncredit.Thesellingpriceofinventorywasasfollows:8/14$1308/31150P1WEIGHTEDAVERAGEWhenaunitissold,theaveragecostofeachunitininventoryisassignedtocostofgoodssold.P1WEIGHTEDAVERAGEFirst,weneedtocomputetheweightedaveragecostperunitofitemsininventory.P1WEIGHTEDAVERAGETheCostofGoodsSoldfortheAugust14thsaleis$2,000.Afterthissale,thereare5unitsininventoryat$500.P1WEIGHTEDAVERAGEP1WEIGHTEDAVERAGECostofGoodsSoldforAugust31=$2,622AftertheAugust31sale,thereare12unitsininventoryat$1,368:(12@$114)P1WEIGHTEDAVERAGEHerearetheentriestorecordthepurchasesandsalesentriesforTrekking.Thenumbersinredaredeterminedbythecostflowassumptionused.Allpurchasesandsalesaremadeoncredit.Thesellingpriceofinventorywasasfollows:8/14$1308/31150P1FINANCIALSTATEMENTEFFECTSOFCOSTINGMETHODSBecausepriceschange,inventorymethodsnearlyalwaysassigndifferentcostamounts.A1FINANCIALSTATEMENTEFFECTSOFCOSTINGMETHODSAdvantagesofMethodsFirst-In,First-OutWeightedAverageLast-In,First-OutA1FINANCIALSTATEMENTEFFECTSOFINVENTORYERRORSIncomeStatementEffectsA2FINANCIALSTATEMENTEFFECTSOFINVENTORYERRORSBalanceSheetEffectsA2ENDOFCHAPTER6