Ch6+Note+Posting - Chapter 6 Reporting & Analyzing...

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Determining Ownership of Goods to be Included in Inventory Count: Seller Buyer FOB Shipping FOB Destination Inventory Costing Methods: FIFO Average Specific Identification 1
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The Effects of Rising and Declining Costs of Inventory on Financial Statement Schedule of Cost of Goods Sold Sales 2 Rising Cost of Inventory Declining Cost of Inventory FIFO [EI–New Price (H) ] Item ( old price ) sold first Average (EI–Avg Price) FIFO [EI–New Price (L) ] Item ( old price ) sold first Average (EI–Avg Price) Ending Inventory Cost of Goods Sold Gross Profit Net Income Cost of Goods Sold = Gross Profit Cost of Goods Sold Ending Inventory Goods Available for Sale Goods Available for Sale Total Purchases (Net) Gross Purchases Less: Pur. Disc’t Add: Transportation Net Purchases Beginning Inventory =
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Inventory Costing Methods: Perpetual Inventory System: Periodic Inventory System: B + P – E = CGS Beginning Inventory 80 x $10= $ 800 Purchases 140 x $15= $ 2,100 120 x $20= $ 2,400 $ 4,500 GAS 340 $ 5,300 $15.59 FIFO WA Ending Inventory 100 x $20= $ 2,000 100 x $15.59= $1,559 CGS $ 3,300 $3,741 4 Total CGS: FIFO: $ 700
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This note was uploaded on 06/18/2011 for the course MGT b05 taught by Professor Liang during the Spring '11 term at University of Toronto- Toronto.

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Ch6+Note+Posting - Chapter 6 Reporting & Analyzing...

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