Lecture13 - Lecture 13 Inventory Accounting for Harley...

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Unformatted text preview: Lecture 13 Inventory Accounting for Harley Davidson and Steris Goals of Today’s Class • Recap of Inventory Acctg. (Lecture 12) • Case Study – Harley Davidson – Steris • Since historical cost is used as the basis for valuing inventories, then identical goods purchased at different times may have different values associated with them. Cost of Beginning Inventory + Cost of Acquisitions = Cost of Ending Inventory + Cost of Goods Sold/Used Cost of Goods Available for Sale Inventory T-Account Inventory Cost of Acquisitions Cost of Beginning Inventory Cost of Goods Sold / Used Cost of Ending Inventory Cost of goods available for sale While, in general, the quantity of goods sold and the quantity of goods held in the ending inventory are known, the cost of goods sold and the cost of the ending inventory must be determined Allocating Cost of Goods Available for Sale Questions: • How is the cost of goods sold to be determined? • How is the cost of the goods remaining after the sale to be determined? • First-in, first-out (FIFO) • Last-in, first-out (LIFO) • Weighted average • Specific Cost Alternative Cost Flow Assumptions Manufacturing Inventory Costs • Manufacturing firms have 3 categories of inventory: 1. Raw Materials 2. Work in Process 3. Finished Goods Manufacturing Inventory Costs General Rule for Manufacturing Costs: Costs incurred in the manufacturing process, to produce goods for resale, are capitalized as a cost of Work in Process Inventory when they are incurred. Subsequently, those costs are transferred to the Finished Goods Inventory as production is completed and the goods become available for sale. It is only when the goods are sold and delivered to the customer that the costs of producing them are expensed, as a part of the Cost of Goods Sold. Hawkins, Inc. Hawkins, Inc. Reports Fourth Quarter, Fiscal 2009 Results 19 June 2009 (c) Copyright 2009, Drug Week via NewsRx.com 2009 JUN 19 - (NewsRx.com) -- Hawkins, Inc. (NASDAQ:HWKN) announced fourth quarter and full-year results for its fiscal year 2009 ended March 29, 2009. Sales of $284.4 million for fiscal 2009 represented an increase of 52.3% over $186.7 million in sales for the prior fiscal year. Net income for fiscal 2009 was $23.8 million, or $2.32 per share, fully diluted, compared to net income for fiscal 2008 of $9.1 million, or $0.89 per share, fully diluted. Income from operations for fiscal 2009 was negatively impacted by a LIFO inventory charge of approximately $10.0 million (approximately $6.2 million, or $0.61 per share, after tax) resulting from increased inventory costs and, to a lesser extent, changes in inventory product mix. The LIFO charge for the prior fiscal year was approximately $1.3 million (approximately $847,000, or $0.08 per share, after tax). Winnebago Industries Reports Results for Third Quarter and First Nine Months of Fiscal Year 2009...
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This note was uploaded on 06/28/2009 for the course ACCT 101 taught by Professor Armstrong during the Summer '09 term at UPenn.

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Lecture13 - Lecture 13 Inventory Accounting for Harley...

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