Chiorean FROM: Section AE2 DATE: June 30‚ 2012 SUBJECT: Samuel’s Electronics Analysis INTRODUCTION In this memorandum‚ I’ll discuss strengths and weaknesses of using FIFO versus LIFO as the cost flow assumption in the accountant’s process of inventory valuation for financial statement reporting to a company’s external stakeholders. FIFO AND LIFO ANALYSIS As shown in the exhibit‚ because the price of LG TV was decreasing‚ Samuel’s Electronics would record less cost of good sold and consequently have
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go to this address to get the solution: http://homeworkfox.com/tutorials/business/505/acc-422-week-2-wileyplus-assignment-exercises/ ACC 422 Week 2 WileyPlus Assignment - Exercises Business - Accounting ACC422 Week 2 E7-2 E7-8 E8-5 E8-14 P7-1 E8-25 E7-2 (Determine Cash Balance) Presented below are a number of independent situations. Instructions For each individual situation‚ determine the amount that should be reported as cash. If the item(s) is not reported as cash‚ explain the
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Then we can compare the performance of these two companies in 2013 (as shown below). However‚ we cannot get find enough information to make a comprehensive adjustment on 2012 data (in particular‚ we don’t have the estimation on 2011 inventory using FIFO method). As a result‚ we cannot calculate the growth rate of EPS precisely here. 2.) Assess the financial performance of Nuware versus R.P. Stuart. Nuware and R.P. Stuart are in the same industry and share virtually identical business model
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University of Phoenix Material Accounting Memo interoffice memo to: Accounting Team mate from: Andrew Accountant subject: LIFO FIFO explanation date: 6/10/2015 Team-mate We need to get together later this week—boss has requested we give her an overview of Last In/First Out (LIFO) versus First In/First Out (FIFO) as it might apply to our company. She needs the background info to present to our president and the board late this month. This is to help management make the decision of which inventory
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655 (b) (1) FIFO 500 @ $6.79 = $3‚395 200 @ $6.60 = 1‚320 $4‚715 (2) LIFO 100 @ $6.00 = $ 600 100 @ $6.08 = 608 500 @ $6.79 = 3‚395 $4‚603 (c) Total merchandise available for sale $33‚655 Less inventory (FIFO) 4‚715 Cost of goods sold $28‚940 (d) FIFO. 13. The first-in‚ first-out method approximates the specific identification method when the physical flow of goods is on a FIFO basis. When the
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approximately the same under different inventory costing methods and the choice of method does not materially affect net income. To see this‚ remember that FIFO profits include holding gains on inventories. If the inflation rate is low (or inventories turn quickly)‚ there will be less holding gains (inflationary profit) in inventory. Q6-3. FIFO holding gains occur when the costs of earlier purchased inventory are matched against current selling prices. Holding gains on inventories increase with an
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Publishing. Inventory Management. R. Anthony Inman. Inventory Management – levels‚ system‚ model‚ type‚ business‚ system‚ what is inventory? http:www.referenceforbusiness.com/management/Int-Loc/Inventory-Management.html LIFO vs. FIFO: Understanding the Difference. Aunindita. LIFO vs. FIFO: Which One is Better for my Business? http://www.brighthub.com/office/finance/articles/81950.aspx Master Budget and Responsibility Accounting. Strayer University. (2008). ACC 350 Cost Accounting 2008 Custom Edition. New
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and state income tax regulations must be considered. • First-In‚ First-Out Method. The first-in‚ first-out (FIFO) method of costing has the advantage of simplicity. The FIFO method assumes that materials issued are taken from the oldest materials in stock. Therefore‚ the materials are costed at the prices paid for the oldest materials. In many companies‚ the flow of costs using FIFO closely parallels the physical flow of materials. For example‚ if materials have a tendency to deteriorate in storage
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E5-11 a) Compute Payton’s gross profit. GROSS PROFIT = 900‚00 - 540‚000 = $ 360‚000 ______________________________________ b) Compute the gross profit rate. Why is this rate computed by financial statement users? (360‚000/900‚000)/100 = 4/10of 100 = 40% This is known as the GROSS PROFIT MARGIN. ______________________________________ c) What is Payton’s income from operations and net income? 1)Income from Operations = 360‚000 - 230‚000 = $130‚000. 2)Net Income = 130‚000 - 11‚000
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average of the costs available. Costs of goods sold and Ending inventory: -Cost of goods sold + ending inventory = the total goods available for sale. -Cost of goods available for sale must be allocated between cost of goods sold and ending inventory. FIFO cost flow assumption: The cost of items purchased earliest are the costs that will be transferred first to cost of goods sold on the income statement. LIFO cost flow assumption: The cost of items purchased latest are the costs that will be transferred
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