Chapter 6 - 1750 Lower cost or market In both inventory...

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Beginning Inventory BI: 100 units @ 10 = $1000 Use a weighted average $5,000 = 11.11 200 units @ 11 = $2200 450 150 units @ 12 = $1800 Cost flow assumption Specific Identification ID for an item, ex: a car and its serial #, homes, etc. . FIFO LIFO First Last In In First First Out Out The choice of the inventory expensing that the company chooses does have an affect on its income.
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450 AVG 5000 75 inv 833.25 375 sold 4166.75 expense that amount 450 FIFO 5000 75 inv 900 left in inv 375 4100 expense that using FIFO 450 LIFO 5000 75 inv 750 left 375 4250 expense using LIFO AVG Sales 6000 6000 6000 CGS 4167 4100 4250 GP 1833 900
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Unformatted text preview: 1750 Lower cost or market In both inventory systems, periodic and perpetual, our goal is to allocate the inventory totals. In order to transfer dollars we must have a cost flow assumptions that allow us to expense it. The final step is to compare the totals using the lower cost or market rule. Market value is the replacement cost. Safeguarding Inventory, Controls Keeping the duties of taking inventory out and accounting separate. One employee cannot do both. The same is true with accounts recievable and payments. 280...
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Chapter 6 - 1750 Lower cost or market In both inventory...

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