ch08 - Chapter 8-1 C H A P T E R C H A P T E R 8 8...

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Unformatted text preview: Chapter 8-1 C H A P T E R C H A P T E R 8 8 VALUATION OF INVENTORIES: VALUATION OF INVENTORIES: A COST-BASIS APPROACH A COST-BASIS APPROACH Intermediate Accounting I Prof. Volkan Muslu Chapter 8-2 Finished Goods: Items held for sale (books) Raw material and Work in process: Goods to be used in the production of goods to be sold (steel, non-refined oil). Supplies: Goods to be used in production but not primary materials (glue, cleaning materials) Inventory Issues Inventory Issues LO 1 Identify major classifications of inventory. LO 1 Identify major classifications of inventory. Classification Chapter 8-3 Inventory Issues Inventory Issues LO 1 Identify major classifications of inventory. LO 1 Identify major classifications of inventory. Chapter 8-4 Inventory Cost Flow Inventory Issues Inventory Issues Illustration 8-2 Illustration 8-2 LO 1 Identify major classifications of inventory. LO 1 Identify major classifications of inventory. Chapter 8-5 Inventory Cost Flow Inventory Issues Inventory Issues Illustration 8-3 Illustration 8-3 LO 1 Identify major classifications of inventory. LO 1 Identify major classifications of inventory. Companies use one of two types of systems for maintaining inventory records perpetual system or periodic system . Chapter 8-6 Inventory Cost Flow Inventory Cost Flow LO 2 Distinguish between perpetual and periodic inventory systems. LO 2 Distinguish between perpetual and periodic inventory systems. Perpetual System Continuously tracks inventory 1. Purchases are debited to Inventory. 2. Freight-in is debited to Inventory. Purchase returns, allowances, and discounts are credited to Inventory. 3. Cost of goods sold is debited and Inventory is credited at the time of sale. 4. Each type of inventory is tracked using subsidiary records. Chapter 8-7 Inventory Cost Flow Inventory Cost Flow LO 2 Distinguish between perpetual and periodic inventory systems. LO 2 Distinguish between perpetual and periodic inventory systems. Periodic System Periodically tracks inventory 1. Purchases are debited to Purchases. 2. Physical count determines Ending Inventory and Cost of Goods Sold. Beginning inventory $ 100,000 Purchases, net 800,000 Goods available for sale Chapter 8-8 Inventory Cost Flow Inventory Cost Flow LO 2 Distinguish between perpetual and periodic inventory systems. LO 2 Distinguish between perpetual and periodic inventory systems. Illustration: Fesmire Companys transactions: Record these transactions using the Perpetual and Periodic systems. Chapter 8-9 Inventory Cost Flow Inventory Cost Flow LO 2 Distinguish between perpetual and periodic inventory systems. LO 2 Distinguish between perpetual and periodic inventory systems. Illustration 8-4 Illustration 8-4 Illustration: Solution on notes page Chapter 8-10 Inventory Control Inventory Issues Inventory Issues LO 2 Distinguish between perpetual and periodic inventory systems....
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This note was uploaded on 02/14/2011 for the course AIM 6330 taught by Professor Volkanmuslu during the Spring '10 term at University of Texas at Dallas, Richardson.

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ch08 - Chapter 8-1 C H A P T E R C H A P T E R 8 8...

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