Inventory:
Inventory represents the inventory purchased by a firm for re-sale, which has not been sold as on the date of the balance sheet. The inventory is disclosed in assets side of the balance sheet under the head Current Assets. Inventory is also disclosed in the credit side of the trading account of the firm.
Inventory purchases opens up two approaches for a company with which they can record the purchases so that inventory can be recorded under the proper accounting system. The first method is the perpetual inventory system method and the second one is the periodic inventory system method.
Perpetual Inventory system:
Under perpetual inventory system of recording inventory, whenever a purchase or sale of inventory is made, each time there is an update made to the inventory account. Thus every purchase whenever is made is directly recorded in the inventory account under the perpetual inventory system of recording inventory.
Cost of goods sold:
The cost of goods sold shows the total manufacturing costs incurred in a period that is direct materials cost, direct labor cost and manufacturing overhead cost.
Cost of goods sold represents the direct cost associated with the production of the goods that is to be sold by the company. Cost of goods includes the cost related to materials, direct labor costs and direct expenses which are used in the production of goods.
Ending inventory:
The cost of ending inventory is computed by deducting cost of goods sold from the cost of goods available for sale. The cost of goods available for sale is computed by adding the beginning inventory and the purchases made during the period.
Assume that JR Tire Store completed the following perpetual inventory transactions for a line of tires:...
Assume that RB Tire Store completed the following perpetual inventory transactions for a line of tires: A (Click the icon to view the transactions.) Read the requirements. Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transactio Once all...
2. Assume that JR Tire Store completed the following perpetual inventory transactions for a line of tires: May 1 Beginning merchandise inventory 16 tires @ $65 each 10 tires @ $78 each 11 Purchase 23 Sale 12 tires @ $90 each 26 14 tires @ $80 each Purchase Sale 29 15 tires @ $90 each Requirement: 1) Compute cost of goods sold and gross profit using the FIFO inventory costing method. 2) Compute cost of goods sold and gross profit...
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transacions in chronalogical order, calculating news inventory an hand balances ater each transaction Once all of the transacions have been entered into the perpetal record, caloulate the quantly and total oost of merchandise inventory purchased, sold, and on hand at the end...
VIIVIVUIN 1 2 of 15 (14 complete) Score: 0 of 10 pts E6-20 (similar to) Assume that JL. Tire Store completed the following perpetual Inventory transactions for a line of tires: (Click the icon to view the transactions.) Read the requirements Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO Inventory costing method. Enter the transactions...
Requirement 1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross protit. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost...
Question Help Assume that JR Toys store bought and sold a line of dolls during December as follows: Click the icon to view the transactions) JR Toys uses the perpetual inventory system, Read the requirements Requirement 1. Compute the cost of goods sold cost ofending mechandise ry and gros proting the FIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FFO inventory outing method Enter the transactions in chronological...
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end...
Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) A Requirements X 1. 2. Compute cost...
AssumeFisher Tire, Inc., completed the following perpetual inventory transactions for a line of tires. Beginning inventory. . . . . . 38 tires @ $130 Purchase. . . . . . . . . . . . . . . 16 tires @ $135 Sale. . . . . . . . . . . . . . . . . . . 43 tires @ $224 . Compute cost of goods sold and gross profit using FIFO, LIFO, and...
Steel Mill began August with 60 units of iron inventory that cost $ 25 each. During August the company completed the following inventory transactions: Units Unit Cost Unit Sales Price Aug. 3 Sale 45 $72 8 Purchase 65 $41 21 Sale 55 86 30 Purchase 20 56 Requirement 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory...