percentage-of-completion to completed-contracts. http://share.pdfonline.com/5c8e45d55742447e97c79590cb6ead5d/ch22.htm Page 1 of 35 CHAPTER 22 6/18/13 9:36 PM d b c a b b c d c c b 28. Disclosures required for a change from LIFO to FIFO. 29. Change from FIFO to LIFO. 30. Change in accounting estimate. 31. Change in accounting estimate. 32. Identify a change in accounting estimate. 33. Change in accounting estimate. 34. Identify a change in accounting estimate. 35. Identify a change in reporting
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varies among LIFO‚ FIFO‚ and average cost. What is the value of inventories that Dow Chemical values at LIFO basis as of December 31‚ 2012? .29 * 8476 million= 2485 million 2. Suppose that Dow Chemical had used first-in‚ first-out (FIFO) as a cost flow assumption for all of their Inventories. Would the book value of Inventories at December 31‚ 2012 be higher than‚ lower than‚ or the same as the amount currently recorded? If different‚ by how much? Inventories would be higher with FIFO. Would be
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their competitors or nature of the industry they are in. John Deere uses LIFE as their cost flow assumption. d) The balance sheets of the two companies would differ in the LIFO reserve John Deere must have on the balance sheet. For John Deere‚ they utilize LIFO‚ which “stores” the value of the product in inventory more than FIFO. John Deere can keep their inventory stocked with lower priced goods on the balance sheet‚ when in reality they are moving all the same inventory. If prices are decreasing
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Process Costing Characteristics of Process Manufacturing • Since each product within a product line passing through the processes would receive similar ‘‘doses’’ of materials‚ labor‚ and overhead‚ costs are accumulated by process. • Process costing works well whenever relatively homogeneous products pass through a series of processes and receive similar amounts of manufacturing costs Units are homogeneous and subjected to the same operations for a given process and each unit produced in a
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Retail Method vs. FIFO or LIFO In the case‚ the University Store provided plenty of goods and services with various costs. They frequently have their costs‚ selling prices and discounted prices changed. This process would contain a large amount of work since the Store kept large number of books. Although the Store has planned to record data by establishing a new software system‚ they used the retail method easing and simplifying inventory tracking. Comparing the FIFO or the LIFO method‚ the retail
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(n.d.). Our History. Retrieved from: http://www.jnj.com/connect/about- jnj/company-history/ Mcintosh‚ K. A. (n.d.). ehow What is an Operating Budget?. Retrieved from: http://www.ehow.com/info_7947151_operating-budget.html Peavler‚ R. (n.d.). LIFO and FIFO Inventory Accounting Methods Overview of Two Methods of Accounting for and Tracking Inventory. Retrieved from: http://bizfinance.about.com/od/inventory/a/Inventory_Accounting_LIFO_FIFO.htm
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practices in comparison to Smelters current FIFO Inventory management system and issued a proposal to change their inventory valuation method from LIFO to FIFO. Factors to Consider Western Aluminum addressed multiple topics to validate their proposal idea. As mentioned above‚ the acquisition of Smelter and its projected out puts is one consideration made. The high-value LIFO layers and commodity price swings has resulted in large non-cash adjustments to Inventory. Switching to FIFO will allow
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6-2 Lewis Corporation* Lewis Corporation had traditionally used the FIFO method of inventory valuation. You are given the information shown in exhibit 1 on transactions during the year affecting Lewis’s inventory account. (The purchases are in sequence during the year. The company uses a periodic inventory method). Exhibit 1 Inventory Transactions 2000-2002--------------------------------------------------- 2000 Beginning Balance 1
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equal to the actual cost of goods available. FIFO‚ LIFO‚ and weighted average are come methods used to account for inventory. FIFO assigns first costs incurred to COGS on income statement. LIFO assigns last costs incurred to COGS on the income statement and if using a weighted average method a company would assign average cost incurred to COGS on income statement. Deere and Company uses LIFO costing method. d. Assuming that prices are increasing‚ FIFO gives a better indication of the value of ending
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(20–25 minutes) (a) (1) LIFO 600 @ $6.00 = $3‚600 100 @ $6.08 = 608 $4‚208 (2) Average cost Total cost = $33‚655* = $6.35 average cost per unit Total units 5‚300 700 @ $6.35 = $4‚445 EXERCISE 8-14 (Continued) *Units Price Total Cost 600 @ $6.00 = $ 3‚600 1‚500 @ $6.08 = 9‚120 800 @ $6.40 = 5‚120 1‚200 @ $6.50 = 7‚800 700 @ $6.60 = 4‚620 500 @ $6.79 = 3‚395 5‚300 $33‚655 (b) (1) FIFO 500 @ $6.79 = $3‚395
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