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Chapter 6 Inventories Lecture 28. Lecture Overview FIFO (Perpetual Inventory System) FIFO (Periodic Inventory System)

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Presentation on theme: "Chapter 6 Inventories Lecture 28. Lecture Overview FIFO (Perpetual Inventory System) FIFO (Periodic Inventory System)"— Presentation transcript:

1 Chapter 6 Inventories Lecture 28

2 Lecture Overview FIFO (Perpetual Inventory System) FIFO (Periodic Inventory System)

3

4 Cost of Mdse. Sold

5 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200

6 Cost of Mdse. Sold

7 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060

8 Cost of Mdse. Sold

9 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060 1082116832060 821168 Note that a new layer is formed.

10 Cost of Mdse. Sold

11 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060 1082116832060 821168 On January 22, the firm sells four units at $31 each. 224218432060 42184

12 Cost of Mdse. Sold

13 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060 1082116832060 821168 224218432060 42184 282214232060 22142

14 Cost of Mdse. Sold

15 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060 1082116832060 821168 224218432060 42184 282214232060 22142 30102222032060 22142 1022220

16 Cost of Mdse. Sold

17 Item 127B PurchasesCost of Mdse. SoldInventory Balance UnitTotalUnitTotalUnitTotal Date Qty.Cost Cost Qty.CostCost Qty.CostCost Jan. 11020200 472014032060 1082116832060 821168 224218432060 42184 282214232060 22142 30102222032060 22142 1022220 Totals183881326615322

18

19 Lifo Periodic

20 Jan. 1Beginning Inventory 200 units @ Rs.9 Mar. 10 Purchase 300 units @ Rs.10 400 units @ Rs.11 Sept. 21 Purchase 100 units @ Rs.12 Nov. 18 Purchase 1,000 units available for sale during year Using lifo, the most recent batch purchased is considered the first batch of merchandise sold.

21 Jan. 1Beginning Inventory 200 units @ Rs.9 Mar. 10 Purchase 300 units @ Rs.10 400 units @ Rs.11 Sept. 21 Purchase 100 units @ Rs.12 Nov. 18 Purchase 1,000 units available for sale during year Assume again that 700 units were sold during the year.

22 200 units @ Rs.9 300 units @ $10 400 units @ $11 100 units @ $12 1,000 units available for sale during year Sold these 100 Sold these 400 Sold 200 of these 100 units @ Rs.10 Rs. =Rs.1,800Jan. 1 = 3,000Mar. 10 =4,400Sept. 21 =1,200Nov. 18 $10,400 0 0 1,000 Ending Inventory Rs. Rs.2,800

23

24 Jan. 1 200 units at Rs. 9 Mar. 10 300 units at Rs.10 Sep. 21 400 units at Rs.11 Nov. 18 100 units at Rs.12 Rs.1,800 Rs.3,000 Rs.4,400 Rs.1,200 Rs.1,800 Rs.1,000 Cost of Merchandise Sold 200 units at Rs.9 10,400 Rs.10,400 Rs.4,400 Rs.1,200 Rs.2,800 Rs.7,600 100 units at Rs.10 200 units at Rs.10 400 units at Rs.11 100 units at Rs.12 Rs.2,000 700 units 1,000 units 300 units Purchases Merchandise Available for Sale Rs.1,800 Cost of Merchandise Sold

25 Lecture Overview LIFO (Perpetual Inventory System) LIFO (Periodic Inventory System)

26 End of Lecture 27

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