Explain the inventory cost flow assumption: FIFO, LIFO, weighted average. Provide examples.

Q: Using the lower of cost or market, what should the total inventory value be for the following items:…

A:

Q: Calculate ending inventory under FIFO and LIFO both with workings

A: Formula: Ending inventory = Beginning inventory + Purchases - sales units

Q: Under which inventory cost flow assumption is the oldest cost of inventory items likely to remain on…

A: Correct option is LIFO

Q: Which of the three methods of inventory costing -FIFO, LIFO, or weighted average cost - will in…

A: FIFO - Inventory purchased first is assumed to be sold first. LIFO - Inventory recently purchased is…

Q: Which of the following is not an inventory method/cost flow assumption? O a. First-in, first-out O…

A: 5 methods for inventory cost are below: The retail inventory method. The specific identification…

Q: a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of…

A: Ending inventory is computed by adding the beginning inventory and purchases and then subtracting…

Q: Which cost formula for inventory best reflects the current value of inventory on the balance sheet?…

A: inventory valuation methods are based on the flow of inventory. There are mainly four methods 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: calculate the value of closing inventory uing the weighted average cost inventory valuation method

A: Solution: Weighted average cost per unit is computed as = Cost of goods available for sale / units…

Q: By following the LIFO process calculate the Ending inventory value.

A: Introduction: LIFO: LIFO stands for Last in First out. Which means last received inventory to be…

Q: How much is the total cost of inventory to be presented in the financial position of XYZ?

A: Inventory valuation is done by the Business Entity as per the rules prescribed under the Relevant…

Q: On the basis of the following data, determine the value of the inventory at the…

A: Inventories are recognized lower of cost or market. This rule is applied to inventory item-wise.…

Q: is a measure of inventory profitability that relates a gross margin to the cost of the inventory.

A: Inventory profitability means profits related to inventory cost which are calculated using these two…

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: On the basis of the following data, determine the value of the inventory at the…

A: Note: Under the Lower of cost or Market method, inventory is valued at the lower of the Cost of the…

Q: a. What value should be assigned to the ending inventory using FIFO? b. What value should be…

A: FIFO method: Under this method of inventory valuation, it is assumed that item of inventory…

Q: For commercial reasons, a weighted average and inventory system from lifo fifo should be considered.

A: The LIFO (Last in, first-out) The LIFO accounting method is used to value inventory. This method is…

Q: i. Determine the cost assigned to the ending inventory by using FIFO method of inventory valuation…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Which inventory method is being used when the natural flow of goods is followed? a.) Specific ID b.)…

A: Inventory Valuation: - This is defined as the valuation wherein the changes between the value of the…

Q: The cost method that will yield an ending inventory value that is somewhere between possible high…

A: Inventory valuation has 4 Methods - 1. FIFO 2. LIFO 3. Weighted Average 4. Specific Identification…

Q: FIFO method to determine its cost of inventory.

A: Under FIFO method of inventory valuation, goods come first into the store are sold first.

Q: The inventory costing method that reports the most current prices in ending inventory is Oa. average…

A: LIFO: LIFO stands for Last-In, First-Out. In this method inventory purchased at last will be sell…

Q: The inventory evaluation method which does not represent the actual ending inventory value is?…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: Required: Compute the ending inventory cost using   a. Moving average method   b. FIFO method

A: The inventory can be valued using various method as LIFO, FIFO and average method.

Q: 1. Calculate the value of closing inventory using the Weighted average cost inventory valuation…

A: As per weighted average cost inventory valuation method, cost per unit is calculated by dividing the…

Q: what is the amount allocated to ending inventory on a LIFO basis?

A: Using the LIFO method, the last purchased units are sold first. Periodic inventory records inventory…

Q: Inventory should be measured at lower of fair value and net realizable value of the inventory.

A: The IAS 2 suggests the requirement for the reporting of the inventories. This states that the…

Q: Explain an example how to calculate net cost of inventory.

A: Net Cost of Inventory indicates the actual cost of inventory purchased. Net cost of inventory is…

Q: Which inventory valuation model serves as a middle-of-the-road approach for taxes and income?…

A: When a corporation values its inventory using FIFO, it reports reduced COGS, which boosts its gross…

Q: On the basis of the following data, determine the value of the inventory at the…

A: Item Cost per unit Market value per unit Lower of cost or market value JFW1 $56 $52 $52 SAW9 28…

Q: When using the periodic inventory system and weighted-average inventory costing method, when is the…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: The following information for Tuell Company is available:                              1. Assume…

A: Inventory refers to all of the items, goods, commerce, and materials held by a company for the…

Q: Which inventory cost flow assumption does IFRS not allow? a. Specific identification. b. FIFO. c.…

A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: What is the purpose of disclosing the difference between the reported LIFO inventory amounts and…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: How is the net cost of inventory calculated?

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

Q: What is the measurement value of inventory? Select one: a. Expected Value b. Fair Value c.…

A: Inventory are the goods which the businesses held for the sale.

Q: Which of the three methods of inventory costing— FIFO, LIFO, or weighted average cost—will in…

A: First-In-First-out (FIFO): FIFO is a method used for recording inventory sold. In this method the…

Q: - ending inventory for Steele Ltd. Using the variable

A: Under variable costing, product cost include variable costs only.

Q: Determine the value of the inventory at the lower of cost or market by applying lower of cost or…

A:

Q: Question: Explain the First-In, First-Out (FIFO) method used for determining COGS and Ending…

A: The inventory can be valued using various methods as FIFO, LIFO, average method.

Q: Which of the following inventory method measures most closely the current cost of inventory?   a.…

A: The inventory valuation is carried out at the end of the accounting period. The different inventory…

Q: The inventory valuation method which assumes that the items purchased first are the first items to…

A: Valuation of an inventory depends upon which items are sold first in the inventory cycle. This gives…

Q: On the basis of the following data, determine the value of the inventory at the lower of cost or…

A: Lower-of-cost-or-market value:The lower-of-cost-or-market value is a method which requires the…

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.