Exercise 8 12 The FASB Accounting Standards Codification represents the single

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. 8- 26
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? 8- 27
Chapter 08 - Inventories: Measurement Exercise 8-13 Cost of goods available for sale: Beginning inventory (2,000 x $6.10) $12,200 Purchases: 10,000 x $5.50 $55,000 6,000 x $5.00 30,000 85,000 Cost of goods available (18,000 units) $97,200 First-in, first-out (FIFO) Cost of goods available for sale (18,000 units) $97,200 Less: Ending inventory (determined below) (15,000 ) Cost of goods sold $82,200 Cost of ending inventory: Date of purchase Units Unit cost Total cost August 18 3,000 $5.00 $15,000 Last-in, first-out (LIFO) Cost of goods available for sale (18,000 units) $97,200 Less: Ending inventory (determined below) (17,700 ) Cost of goods sold $79,500 Cost of ending inventory: Date of purchase Units Unit cost Total cost Beg. Inv. 2,000 $6.10 $12,200 August 8 1,000 5.50 5,500 Total $17,700 8- 28
Chapter 08 - Inventories: Measurement

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