Upload File

cost of sales and inventories

24
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 Cost of Sales and Inventorie s © The McGraw-Hill Companies, Inc., 1999 6 Part One: Financial Accounting

Upload: garth-bullock

Post on 03-Jan-2016

32 views

Category:

Documents


1 download

Report

DESCRIPTION

6. Cost of Sales and Inventories. Part One: Financial Accounting. The McGraw-Hill Companies, Inc., 1999. Available for sale $11,400. Purchases $7,400. Cost of goods sold $?. Merchandise Inventory and Flows. Slide 6-1. Ending inventory. $?. Beginning inventory. $4,000. - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Cost of Sales and Inventories

© The McGraw-Hill Companies, Inc., 1999

6Part One: Financial Accounting

Page 2: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Merchandise Inventory and Flows Slide 6-1

Available for sale $11,400

Purchases $7,400

Ending inventory

Beginning inventory

$?

Cost of goods sold

$?

Inventory reservoir

$4,000

Page 3: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-2 Periodic Inventory Method

Beginning inventory $ 4,000Plus: Purchases 7,400Equals: Goods available for sale 11,400Less: Ending inventory 2,000 Cost of goods sold $ 9,400

Beginning inventory $ 4,000Plus: Purchases 7,400Equals: Goods available for sale 11,400Less: Ending inventory 2,000 Cost of goods sold $ 9,400

In the periodic inventory method a physical count is made of merchandise in the ending inventory.

In the periodic inventory method a physical count is made of merchandise in the ending inventory.

Page 4: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Beginning inventory $ 4,000

Plus Purchases, gross $7,000

Freight-in 600

7,600

Less: Purchase returns 200

Net purchases 7,400

Goods available for sale 11,400

Less: Ending inventory 2,000

Cost of goods sold $ 9,400

Slide 6-3 Periodic Inventory Method

Page 5: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-4 Periodic Inventory Method

First, close the beginning inventory amount:Cost of Goods Sold 4,000

Merchandise Inventory 4,000

Next, close Purchases, Purchases Returns, and Freight-In accounts.Cost of Goods Sold 7,400

Purchase Return 200

Purchases 7,000

Freight-In 600

Entries

Page 6: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-5 Periodic Inventory Method

Entries

The new balance from the physical inventory is entered:Merchandise Inventory 2,000

Cost of Goods Sold 2,000

Finally, Cost of Goods Sold is closed:Income Summary 9,400

Cost of Goods Sold 9,400

Page 7: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-6 Perpetual Inventory Method

Entries

For purchases:Merchandise Inventory 7,000

Cost of Goods Sold 7,000

For shipment to customers:Cost of Goods Sold 8,800

Merchandise Inventory 8,800

For purchase returns:Accounts Payable 200

Merchandise Inventory 200

Page 8: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-7 Perpetual Inventory Method

Item: Cassette Deck, Model S150 Unit: Each Date Receipts Shipments Balance

Unit Unit Unit

Units Cost Total Units Cost Total Units Cost Total

Jan. 2 40 100 100 4,00012 32 100 3,200 8 100 80014 10 1001,000 18 100 1,80025 4 100 400 22 100 2,20031 2 100 200 20 100 2,000

Page 9: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Beginning inventory $ 4,000 $ 6,000

Purchases 7,000 10,000

Goods available for sale $11,000 $16,000

Slide 6-8 Retail Method

At Cost At Retail

$11,000/$16,000 =69%

Page 10: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Sales 13,000

Ending inventory at retail $ 3,000

Ending inventory at cost

Beginning inventory $ 4,000 $ 6,000

Purchases 7,000 10,000

Goods available for sale $11,000 $16,000

Slide 6-9 Retail Method

At Cost At Retail

$ 2,070

$3,000 x .69

Cost of goods sold: $13,000 x .69 = $8,970Cost of goods sold: $13,000 x .69 = $8,970

Page 11: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-10 Flow of Cost Through Inventories

Materials Inventory

Balance, Jan 1 154Purchases 273

Work in Process Inventory

Balance, Jan 1 19

Finished Goods Inventory

Balance, Jan 1 69

Page 12: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-11 Flow of Cost Through Inventories

Balance, Jan 1 154Purchases 273

Balance, Jan 1 19Materials used 264

264

Conversion cost 330

Materials Inventory

Work in Process Inventory

Finished Goods Inventory

Balance, Jan 1 69

Page 13: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-12 Flow of Cost Through Inventories

Balance, Jan 1 154Purchases 273

Balance, Jan 1 19Materials used 264

264

Conversion cost 330

570

Materials Inventory

Work in Process Inventory

Finished Goods Inventory

Balance, Jan 1 69Goods manufactured 570

573 Cost of Goods Sold

Page 14: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-13 Inventory Costing Methods

Specific identificationAverage costFirst-in, first-out (FIFO)Last-in, first-out (LIFO)

Page 15: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-14 Inventory Costing Methods

Basic DataBasic Data

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Page 16: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-15 Inventory Costing Methods

Specific Identification MethodSpecific Identification Method

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

SOLD 100

SOLD 50

Page 17: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-16

Specific Identification MethodSpecific Identification Method

Units Unit Cost Total Cost

Purchased June 1 10 $ 9 $ 90

Purchased October 1 80 10 800

Ending inventory 90 $890

Units Unit Cost Total Cost

Purchased June 1 10 $ 9 $ 90

Purchased October 1 80 10 800

Ending inventory 90 $890

Cost of goods sold = (100 x $8) + (50 x $9) = $1,250Cost of goods sold = (100 x $8) + (50 x $9) = $1,250

Inventory Costing Methods

Page 18: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-17 Inventory Costing Methods

Average Cost MethodAverage Cost Method

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $8.917 $2,140

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $8.917 $2,140

$2,140$2,140240240

$2,140$2,140240240

Ending inventory: 90 x $8.917 = $802Ending inventory: 90 x $8.917 = $802Ending inventory: 90 x $8.917 = $802Ending inventory: 90 x $8.917 = $802

Cost of goods sold: 150 x $8.917 = $1,338Cost of goods sold: 150 x $8.917 = $1,338Cost of goods sold: 150 x $8.917 = $1,338Cost of goods sold: 150 x $8.917 = $1,338

Page 19: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Slide 6-18 Inventory Costing Methods

FIFOFIFO

Sold 100

Sold 50

Page 20: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Slide 6-19 Inventory Costing Methods

FIFOFIFO

Units Unit Cost Total Cost

Purchased June 1 10 9 90

Purchased October 1 80 10 800

Ending inventory 90 $890

Units Unit Cost Total Cost

Purchased June 1 10 9 90

Purchased October 1 80 10 800

Ending inventory 90 $890

Cost of goods sold: (100 x $8) + (50 x $9) = $1,250Cost of goods sold: (100 x $8) + (50 x $9) = $1,250

Page 21: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Units Unit Cost Total Cost

Inventory, January 1 100 $8 $ 800

Purchased June 1 60 9 540

Purchased October 1 80 10 800

Goods available for sale 240 $2,140

Goods sold 150

Ending inventory 90

Slide 6-20 Inventory Costing Methods

LIFOLIFO

Sold 80

Sold 60

Sold 10

Page 22: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Units Unit Cost Total Cost

Inventory, January 1 90 $8 $720

Units Unit Cost Total Cost

Inventory, January 1 90 $8 $720

Slide 6-21 Inventory Costing Methods

LIFOLIFO

EndingEnding inventoryinventory

Cost of goods sold: (80 x $10) + (60 x $9) + (10 x $8)

= $1,420

Cost of goods sold: (80 x $10) + (60 x $9) + (10 x $8)

= $1,420

Page 23: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

FIFO $1,250 $890 $2,140

Average cost 1,338 802 2,140

LIFO 1,420 720 2,140

FIFO $1,250 $890 $2,140

Average cost 1,338 802 2,140

LIFO 1,420 720 2,140

Slide 6-22 Comparison of Method

Cost of Ending Goods Sold Inventory Total

Page 24: Cost of Sales and Inventories

Irwin/McGraw-Hill

© The McGraw-Hill Companies, Inc., 1999

Chapter 6

The End


Inventories and Cost of Sales

Accounting for Inventories and Cost of Goods Sold

Inventories, Markups, and Real Rigidities in Menu Cost Models · 2019-10-31 · existing inventories in anticipation of future cost declines and inventory investment counterfactually

Bab 8 - Valuation of Inventories, a Cost-Basis Approach

Managing Cycle Inventories - University of Texas at Dallasmetin/FuJen/Folios/... · Managing Cycle Inventories Matching Supply and Demand. 2 Outline ... Common transportation cost

Financial Accounting and Accounting Standards · Valuation of Inventories: 8 A Cost-Basis Approach ... Valuation of Inventories: 8 A Cost-Basis Approach ... accounting frauds,

Lessons from inventories and sales of flutes and recorders, 1650-1800

Chapter 08- Inventories and Cost of Goods Sold

construction contracts, borrowing cost, inventories

Inventories and Cost of Sales Chapter 5 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior

CHAPTER Valuation of Inventories: 8 A Cost-Basis · PDF fileValuation of Inventories: 8 A Cost-Basis Approach Inventories in the Crystal Ball A substantial increase in inventory may

Inventories: Additional Issues Chapter 9. Reporting —Lower of Cost or Market Inventories are valued at the lower of cost or market (LCM). LCM is a departure

Chapter 8 Cost-based Inventories and Cost of Sales 7ce v1 tb08.pdf · Chapter 8 Cost-based Inventories and Cost of Sales 1) ... A valuation allowance account will be used when a company

LG Chem, Ltd. · 2020. 3. 10. · Total2,515,331 (88,967) 2,426,364. During the year, the cost of inventories recognized as expense and included in ‘cost of sales’ amounted to

Chapter 10 Valuation of Inventories: A Cost-Basis Approach ACCT-30301

Inventories and sales uncertainty

Inventories, Sales, and Inventory-Sales Ratios for ... · ment cost is the relevant value for economic decisions relating to inventories and for measuring changes in inventory as

AP 30 Inventories and Cost of Sales

Inventories and Cost of Goods Sold

Inventories: Cost Measurement and Flow … the physical management of inventory. ... Chapter 8 Inventories: Cost Measurement and Flow Assumptions 8-3. ... Cost Measurement and Flow

Inventories: Cost Measurement and Flow Assumptions · 2009-11-05 · CHAPTER . Inventories: Cost . Measurement and Flow Assumptions . OBJECTIVES . After careful study of this chapter,

Advance Monthly Retail Sales Manufacturing and Trade: Inventories and Sales Monthly Wholesale Trade Manufactures Shipments, Inventories and Orders

Wiley - Chapter 8: Valuation of Inventories: A Cost-Basis Approach

Valuation of Inventories: A Cost-Basis Approach

6_Cost of Sales and Inventories

Cost of sales

CH_08_Valuation of Inventories, A Cost Basic Approach

Audit Program for Inventories and Cost of Salestest.monicpa.mn/pdf/auditeng/AP 30 Inventories and Cost...Form AP 30 Index Reference_____ Audit Program for Inventories and Cost of Sales

McGraw-Hill/Irwin Chapter 6 Cost of Sales and Inventories Copyright © 2011. The McGraw-Hill Companies. All Rights Reserved

CHAPTER 9 Inventories and Cost of Goods Sold about their inventories and cost of goods ... In a periodic inventory system, ... TAKING AN ENDING INVENTORY

INVENTORIES AND COST OF ALES - Kids in Prison ProgramHere are the entries to record the purchases and sales entries. The numbers in red are determined by the cost flow assumption used

ACCOUNTING ILLUSTRATION ACCOUNTING FOR INVENTORIES … · 2013-12-04 · Amount of reparables is at sales price less cost recovery and inflation factors and repair cost Step 10 For

Sales Analysis & Sales & Cost Control

C H A P T E R 8 VALUATION OF INVENTORIES: A COST …staff.uny.ac.id/sites/default/files/pendidikan/Dr. Ratna Candra... · VALUATION OF INVENTORIES: A COST-BASIS APPROACH ... LO 2

CHAPTER 8 Cost-based Inventories and Cost of Sales - Tex … 7ce v1 ch08.pdf ·  · 2017-10-03inventory valuation: This chapter focuses on cost-based inventories. ... This chapter