Method of Inventory Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods: FIFO Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period. LIFO Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory. Average cost method Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period. To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

question 24 choose the correct answer from the choices

#58 Which of the following is not a retrospective-type accounting change? Question 58 options: a Sum-of-the-years'-digits method to the straight-line method b LIFO method to the FIFO method for inventory valuation c "Full cost" method to another method in the extractive industry d Completed-contract method to the percentage-of-completion method for long-term construction contracts Previous PageNext Page

Question 6 Indicate with the appropriate letter the nature of each situation described below: Туре оf Chang e PR Change in policy reported retrospectively P Change in policy reported prospectlively E Change in estimate EC Emror comection Not an accounting change 1. Settling a lawsuit for less than the amount accrued previousily as a provision. 2. Change from FIFO inventory costing to the weighted average inventory costing. However, the oumulative effect of the change cannot be determined. 3. Change by a retail store from recognizing refunds on an actual claims basis to the allowance method. 4. A shift of certain manufacturing overhead costs to inventory that previously were expensed as incurred to more acourately measure cost of goods sold. (Either method is acceptable.) 5. Change from cost model to fair value model for investment property

Answer 2

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 6

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

Answer 7

Chapter 9, Problem 9.6BYP

(a)&(b)

To determine

Method of Inventory

Inventory refers to the current assets that a company expects to sell during the normal course of business operations, the goods that are under process to be completed for future sale, or currently used for producing goods to be sold in the market. Inventory is valued under three methods:

FIFO

Under this inventory method, the units that are purchased first, are sold first. Thus, it starts from the selling of the beginning inventory, followed by the units purchased in a chronological order of their purchases took place during a particular period.

LIFO

Under this inventory method, the units that are purchased last, are sold first. Thus, it starts from the selling of the units recently purchased and ending with the beginning inventory.

Average cost method

Under this method, the cost of the goods available for sale is divided by the number of units available for sale during a particular period.

To Explain: the accounting treatment for a change in the inventory method for (a) not involving LIFO and (b) from the LIFO method.

Answer 8

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 9

(c)

To determine

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 13

Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q

Solution Summary: The author explains the accounting treatment for a change in the inventory method.

To Explain: the accounting treatment for a change in the inventory method to the LIFO method.

Want to see the full answer?

Chapter 9 Solutions