HUECLectPPT3-24

HUECLectPPT3-24 - RetailMethodof InventoryValuation HUEC3043

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Retail Method of  Inventory Valuation HUEC 3043
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Inventory Valuation Inventory is calculated as a dollar  amount Two Basic ways to calculate inventory  valuation: Cost Method Retail Method Cost Method: Using cost values of  opening and closing inventories to  determine cost value of COGS Retail Method: Using the retail values  to determine approximate cost value
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Retail Method Of Inventory (RIM) Used by most moderate and large size  firms Accounts for markdowns and  depreciation value of inventory Benefit of this method is that the  depreciation in retail value is  accounted for by a depreciation in cost  value Results in an inventory number that is  lower of cost value or market value
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Steps to Calculating RIM Calculate total merchandise handled at retail  and cost Calculate cost percent of total merchandise  handled (Calculate cumulative markup)
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HUECLectPPT3-24 - RetailMethodof InventoryValuation HUEC3043

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