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

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Presentation transcript:

Chapter 6 Inventories Lecture 28

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Cost of Mdse. Sold

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

Lifo Periodic

Jan. 1Beginning Inventory 200 Rs.9 Mar. 10 Purchase 300 Rs Rs.11 Sept. 21 Purchase 100 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.

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

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

Jan units at Rs. 9 Mar units at Rs.10 Sep units at Rs.11 Nov 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, units at Rs units at Rs units at Rs units at Rs.12 Rs.2, units 1,000 units 300 units Purchases Merchandise Available for Sale Rs.1,800 Cost of Merchandise Sold

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

End of Lecture 27