Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 150 units @ $10 = $1,500 %3D Purchase 1 200 units @ $12 = $2,400 14 Sale 1 300 units @ $25 22 Purchase 2 250 units @ $17 = $4,250 29 Sale 2 225 units @ $25

Q: Identify the costs of merchandise inventory.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Estimate ending inventory and cost of goods sold using the gross profit method.

A: Under gross profit method, calculation of cost of goods sold: Cost of goods sold = Sales* ( 1 -…

Q: How do I use FIFO and calculate the Cost of Goods and inventory ?

A: FIFO Method: FIFO method also referred to as First-In-First-Out method is an inventory management…

Q: Do the terms LIFO, FIFO, and Weighted Average have anything to do with the actual physical flow of…

A: LIFO stands for Last in First out which means that the accounting will be done in such a manner that…

Q: what is FIFO inventory method?

A: FIFO inventory method is one of the methods of calculation of value of ending Inventory and cost of…

Q: Describe diff erent inventory valuation methods (cost formulas).

A: The manner in which an organization calculates the product costs (inventory value assessment)…

Q: When the perpetual inventory system is used, the inventory sold is debited to a. Cost of Merchandise…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Determine the goods and costs included in inventory.

A: The cost included in inventory includes all the costs incurred to prepare such inventory for sale.…

Q: When computing ending inventory, what is the difference between a LIFO computation and a FIFO…

A: In a LIFO computation, the most recent inventory purchases are assumed to be sold first, and the…

Q: What is meant by the term gross margin? Describe costing inventory using first-in, first-out.…

A: What is meant by the term gross margin?

Q: Determine ending inventory using the dollar-value LIFO inventory method.

A: Dollar-value LIFO method: In this method, the valuation of inventory is calculated on the monetary…

Q: Briefly explain the usefulness of the inventory figure resulting from the application of lower of…

A: Net Realizable Value(NRV) refers to the inventory value which a business entity can realize from…

Q: The inventory costing method that matches each unit of inventory with its actual cost is referred to…

A: There are many methods to calculate the inventory like FIFO and LIFO method, average cost method,…

Q: Costs to be capitalized in the inventory account include which of the following?   a. Cost of the…

A: Introduction:-. Inventory account shown on the balance sheet under current assets section.…

Q: When inventory is held on consignment it should be?   Derecognized Reported as cost of goods sold…

A: Solution: When inventory is held on consignment it should be "Derecognized" as inventory is not…

Q: oods purchased and held for resale are commonly known as _____. perpetual inventoryperiodic…

A: Periodic Inventory System: The periodic inventory system records and updates the inventory at the…

Q: What impact has a JIT inventory system on operating income?

A: JIT or just-in-time is a stock administration technique in which material, labor and products (to be…

Q: What does the cost of merchandise inventory includes?

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.