Cost Flow Methods

Cost Flow Methods - applied to the information in the...

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Cost Flow Methods The cost of items remaining in inventory and the cost of goods sold are easy to determine if  purchase prices and other inventory costs never change, but price fluctuations may force a company  to make certain assumptions about which items have sold and which items remain in inventory.  There are four generally accepted methods for assigning costs to ending inventory and cost of goods  sold: specific cost; average cost; first-in, first-out (FIFO); and last-in, first-out (LIFO). Each method is 
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Unformatted text preview: applied to the information in the following illustrations, summarizing the activity in one inventory subsidiary ledger account at a company named Zapp Electronics. January 1 Beginning inventory100 units @ $ 14/unit March 20 Sale of 50 units April 10 Purchase of 150 units @ $16/unit July 15 Sale of 100 units September 30 Sale of 50 units October 10 Purchase of 200 units @ $ 17/unit December 15 Sale of 150 units December 31 Ending Inventory100 units...
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