(1) Specific identification
(2) First-in-first-out (FIFO)
(3) Last-in-first-out (LIFO)
(4) Average cost
can have a large impact on reported earnings.
measures the cumulative effect of using LIFO, whereas
measures the incremental effect of using LIFO this year.
Allowance for Excess/Obsolete Inventory
estimates the portion of inventory that the
company expects to not sell in the future; i.e., the portion of the deferred expense that
should not be deferred.
Two assignments due at 1:00pm on Friday, February 2
Dow Chemical Company: Inventories
Depreciation at Delta Air Lines and Singapore Airlines(A) (HBS case)
Hints: (1) When answering question 3, use the average of the sum of gross
value of flight equipment owned and leased for 1992 and 1993;
(2) When answering question 3, simply apply different depreciation
assumptions to calculate the hypothetical depreciation expense
Purchase and sale
Depreciation and impairment
What to look for in a statement of cash flows