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Chapter 13: Inventory & Services Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

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Presentation on theme: "Chapter 13: Inventory & Services Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin."— Presentation transcript:

1 Chapter 13: Inventory & Services Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2 Inventory & Services Merchandise inventory includes all goods owned by the business and held for sale. For tracking merchandise inventory, Joann’s Service Merchandise uses Account No , Merchandise Inventory. Peachtree uses a perpetual inventory system. In a perpetual inventory system, a merchandising business updates inventory each time an item is purchased or sold. Inventory calculations include FIFO (first in, first out), LIFO (last in, first out), and average cost methods. 13-2

3 Software Objectives, p Enter inventory maintenance and default information. 2. Enter inventory item information, including Sales account, Merchandise Inventory account, and Cost of Sales account. 3. Enter item codes when recording purchases and sales. 4. Enter inventory adjustments. 5. Make three backups: two for Joann’s Service Merchandise; one for the end-of- chapter exercise. 13-3

4 Web Objectives, p Use your Internet browser to go to the book’s website at Go to the Internet Activity link on the book’s website. Then, select WEB EXERCISES PART 3. Complete the third web exercise in Part 3— Accountant's World. Use a word processing program to write summaries of the websites that you visited. 13-4

5 The journal entry for purchasing four pairs of curtains from Ronald Baker Fabrics at $30 each, p Account ID Account Description DebitCredit Merchandise Inventory /RBF08 Accounts Payable/ Ron Becker Fabrics

6 The journal entry for selling four pairs of curtains to Philip Merchon at $100 each, p. 525 Account ID Account Description DebitCredit Cost of Sales-Wall /pm005 Accounts Receivable/ Philip Merchon Merchandise Inventory Sales-Wall Sales Tax Payable

7 Peachtree Tips Chapters 11 and 12 must be completed before starting Chapter 13. In Chapters 11-13, Peachtree automatically uses the average inventory method. 13-7

8 Backing Up Chapter 13 Backup Name KB Page Nos. Chapter 13 Begin 1,588 KB 533 Chapter 13 1,603 KB Exercise ,534 KB 551. Part 3 continues in Chapter 13. The chart below shows the size of the backups made in Chapter 13. Refer to textbook p. 402 for the chart of all the backups made in Part 3-Chapters 11, 12, 13, 14 and Project

9 Chapter 13 Topics 1. Software & web objectives, p Cost methods, p. 524 a. Average cost, pp b. LIFO (Last in, First Out), pp c. FIFO (First in, First Out), p Types of Inventory Items, pp Getting Started, pp Inventory Defaults, pp Entering inventory item maintenance information, pp Backing up your data, p Inventory adjustments, pp

10 Chapter 13 Topics (concluded) 8. Additional Transactions, pp Printing Reports, pp Backing up Chapter 13 data, pp Internet activity, p Summary and review, p. 548 a. Going to the net, p. 548 b. Short-answer questions, pp c. Exercise 13-1, p. 551 d. Exercise 13-2, p. 552 e. Analysis question, p. 552 f. Chapter 13 index, p. 553 f. Chapter 13 index, p

11 Inventory Defaults, p. 529 From the Navigation Bar, select ; then. Select Set Up Inventory Defaults. The Inventory Item Defaults window is shown on p

12 Taxes/Shipping tab, pp Click on the Taxes/Shipping tab. Read the information on pages 529 and 530. Then, click to close the Inventory Item Defaults window

13 Entering inventory item maintenance information, pp Read the information on page 530. Then, complete steps 1 – 5 on pp

14 Backing up your data, p. 533 Complete steps 1 – 6 on p. 533 to back up your data. Use Chapter 13 Begin as the back up name

15 Inventory Adjustments, pp Read the Inventory Adjustment transaction, p From the Vendors & Purchases page, click. Select New Bill. Record the January 14, 2008 transaction. The Purchases/Receive Inventory window is shown on p Post, then close

16 Inventory Adjustments (concluded), pp Read the transaction, p Then, complete steps 1-6 on page 535. The Inventory Adjustments window is shown on page 535. Complete step 7 on p

17 Additional Transactions, pp Complete the transactions on pages

18 Printing reports, pp Complete steps 1–8 on pages Compare your reports with the ones shown on pages

19 Backing Up Chapter 13 Data, pp Complete steps on p The back up name is Chapter

20 Glossary of Terms Chapter

21 Merchandise inventory, p. 523 Merchandise inventory includes all goods owned by the business and held for resale. The inventory account for Joann’s Service Merchandise is Account No , Merchandise Inventory

22 Merchandising business, p. 523 Retail stores that resell goods and/or perform services

23 FIFO, p. 523 The FIFO (first in, first out) inventory method assumes that the items in the beginning inventory are sold first

24 LIFO, p. 523 The LIFO (last in, first out) inventory method assumes that the goods received last are sold first

25 Internet Activity, p Go to the book’s website at 2 Link to Student Edition. 3 In the Course-wide Content list, link to Part 3 Internet Activities for Chapters Open or Save. (You can also choose Chapter 13, then link to Internet Activities. If you Choose a Chapter, observe that other chapter-specific links are available; for example, Quizzes, PowerPoints, and Going to the Net Exercises.). 4 Complete the Accountant’s World-Chapter 13 exercise. Read steps 1 and 2. 5 Follow the steps shown on the book’s website to complete this Internet activity. 6 Using a word processing program, write a brief summary of what you find. Include all appropriate website addresses

26 Going to the Net, p. 548 Access the Small Business Knowledge Base website at Scroll down the window to Merchandise Inventories: Perpetual Inventory. Answer these questions about perpetual inventory. 1. What is a perpetual inventory at retail? 2. When is a physical count of inventory necessary? 13-26


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