文档介绍：Chapter 8 Inventories and the Cost of Goods Sold
Chapter 8
Inventories and the Cost of Goods Sold
Inventory Defined
Goods owned and held for sale to customers
Current
asset
Inventory
The Flow of Inventory Costs
Purchase cost
(or manufacturing costs)
as incurred
as goods are sold
The Flow of Inventory Costs
In a perpetual inventory system, inventory entries parallel the flow of costs3>.
Which Unit Did We Sell?
Does It Really Matter?
When identical units of inventory have different unit costs, a question naturally arises as to which of these costs should be used in recording a sale of inventory.
Inventory Subsidiary Ledger
A separate subsidiary account is maintained for each item in inventory.
How can we determine the unit cost for the Sept. 10 sale?
Specific identification
LIFO
Average cost
FIFO
To determine the cost of inventory sold, accountants use one of the following inventory valuation methods.
Information for the Following Inventory Examples
The pany (TBC)
Specific Identification
When units are sold, the specific cost of the unit sold is added to cost of goods sold.
Specific Identification
Example
On August 14, TBC sold 20 bikes for $130 each.
Nine bikes originally cost $91 and 11 bikes originally cost $106.
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Specific Identification
Example
The Cost of Goods Sold for the August 14 sale is $1,985, leaving $515 and 5 units in inventory.
Continue
Let抯 look at the entries for the Aug. 14 sale.
Specific Identification
Example
Continue
Retail
Cost
A similar entry is made after each sale.
Specific Identification
Example
Additional purchases were made on August 17 and 28.
Costs associated with sales on August 31 were as follows: 1 @ $91, 3 @ $106, 15 @ $115, & 4 @ $119.
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Specific Identification
Example
Cost of Goods Sold for August 31 = $2,610
Specific Identification
Example
Balance Sheet
Inventory = $1,395
e Statement
COGS = $4,595
Since specific identification is so easy, can’n