AC 310 HW 3&4

AC 310 HW 3&4 - HW 3 & 4 AC 310 TH 2-3:15 Based on...

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AC 310 TH 2-3:15 Based on the data gathered from the WRDS database for the Dell Computer Corp. and the International Business Machines Corp. provides the firms’ inventory valuation methods and annual net incomes and quarterly net incomes for 2002 as well as 2003. The accounting method that a company decides to use to determine costs of inventory can directly impact the balance sheet, income statement, and statement of cash flow. The cost of goods sold appears on the income statement, and ending inventory is shown on the balance sheet under current assets. There are three basis approaches to valuing inventory that are allowed by GAAP: first in, first out (FIFO); last in, last out (LIFO); and average cost. If inflation does not exist, all three of the inventory valuation methods will produce the same results. There are also other inventory valuation methods such as specific identification, retail method, standard cost, and current or replacement cost. Dell uses the first in, first out valuation method which assumes that a company sells
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AC 310 HW 3&4 - HW 3 & 4 AC 310 TH 2-3:15 Based on...

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