ACCT101-Handout07

ACCT101-Handout07 - Acct 101 L12, L13, L16 Handout #07...

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Acct 101 L12, L13, L16 Handout #07 1 Inventory and Cost of Goods Sold Inventory: Tangible property that is held for sale or used to produce goods or services for sale (Current asset). Raw material Work in process Finished goods Exhibit 7.3 (Short/Libby/Libby, page 342) Cost of goods sold Beginning inventory Net purchase Beginning inventory + Net purchase = Cost of goods sold + Ending inventory E 7-2 Case A Case B Case C Net sales revenue. .......... $86,200 $64,170 Beginning inventory. ....... $119,240 $ 70,460 $ 43,360 Purchases .................. 54,200 102,110 Goods available for sale . 173,440 165,530 145,470 Ending inventory. ............ 111,110 121,625 86,930 Cost of goods sold. ......... 62,330 58,540 Gross profit .................. 23,870 15,720 5,640 Expenses .................. 14,000 5,640 Pretax income. ................ $ 9,870 $ (5,420) $ -0-
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Acct 101 L12, L13, L16 Handout #07 2 Inventory costing Methods (P 7-2) Specific identification First-in, first-out (FIFO) Last-in, first-out (LIFO) Cost flow assumptions Weighted average
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This note was uploaded on 12/07/2009 for the course ACCT ACCT 101 taught by Professor H during the Fall '08 term at HKUST.

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ACCT101-Handout07 - Acct 101 L12, L13, L16 Handout #07...

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