11._Inventory_11-10-24_-_pre_class

11._Inventory_11-10-24_-_pre_class - 10/23/2011...

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10/23/2011 1 15.501/15.516 – Financial Accounting Fall 2011 Session 11 Nemit Shroff MIT Sloan School of Management 2 The “ins” of inventory accounting The “outs” of inventory accounting Acquisition costs Cost of goods available for sale Cost of goods sold Ending inventory Beginning inventory Beg Inv. + Purchases = COGAS = COGS + End Inv. Recap of last class…
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10/23/2011 2 Recap of last class… •Beg Inv. + Purchases = COGAS = COGS + End Inv. •F IFO : First In First Out • Remember the conveyor belt •L IFO : Last In First Out • Remember the cookie jar 3 Plan for today… •Convert
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3 5 Conversion from LIFO to FIFO ‐‐ The LIFO reserve The LIFO reserve is the difference between inventory value under FIFO and the value of inventory under LIFO. LIFO reserve = FIFO value LIFO value Companies using LIFO must disclose this reserve. The LIFO reserve allows for comparison of LIFO and FIFO companies. 6
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This note was uploaded on 10/31/2011 for the course 18 18.445 taught by Professor Liewang during the Spring '11 term at MIT.

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11._Inventory_11-10-24_-_pre_class - 10/23/2011...

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