Exercise 8 12 the fasb accounting standards

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Exercise 8-12TheFASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. The specific citation for each of the following items is:1.Define the meaning of cost as it applies to the initial measurement of inventory.
2.Indicate the circumstances when it is appropriate to initially measure agricultural inventory at fair value.
Chapter 08 - Inventories: Measurement
Exercise 8-12 (concluded)3.What is a major objective of accounting for inventory?
4.Are abnormal freight charges included in the cost of inventory?
Chapter 08 - Inventories: Measurement
Exercise 8-13Cost of goods available for sale:Beginning inventory (2,000 x $6.10)$12,200Purchases:10,000 x $5.50$55,0006,000 x $5.0030,00085,000Cost of goods available (18,000 units)$97,200First-in, first-out (FIFO)Cost of goods available for sale (18,000 units)$97,200Less: Ending inventory (determined below)(15,000)Cost of goods sold$82,200Cost of ending inventory:Date of purchaseUnitsUnit cost Total costAugust 183,000$5.00$15,000Last-in, first-out (LIFO)Cost of goods available for sale (18,000 units)$97,200Less: Ending inventory(determined below)(17,700)Cost of goods sold$79,500Cost of ending inventory:Date of purchaseUnitsUnit cost Total costBeg. Inv.2,000$6.10$12,200August 81,0005.505,500Total$17,7008-25Chapter 08 - Inventories: Measurement

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