entered into the Sales Journal. ABFA1023 FUNDAMENTALS OF ACCOUNTING (f) Returns to supplier amounting to RM1‚050 on 26 December 2010 was omitted from the books. (g) Inventory count sheet included inventories that were valued wrongly based on FIFO method totalling RM8‚000‚ instead of the company policy of average cost method‚ which would have totalled RM6‚500. (h) Inventory count included some damaged goods‚ with historical cost of RM19‚000. Estimated repair cost of RM1‚500 would enable these
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There are various methods in the accounting world used to keep track of inventory and cost of goods used. FIFO stands for first in first out method which is the opposite of LIFO‚ last in first out. Both methods have disadvantages and advantages when it comes to tax time or preparing a financial statement for the investors. As the name suggest‚ FIFO will account inventory that came in first will be sold first. This method is effective for companies selling products with expiration dates. Obviously
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attached file Week3 D1: The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controller’s bonus is based on the next income. It is the controller’s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? D2: A variety of depreciation methods are used to allocate the cost of an asset to all of the accounting periods benefited
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attached file Week3 D1: The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controller’s bonus is based on the next income. It is the controller’s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? D2: A variety of depreciation methods are used to allocate the cost of an asset to all of the accounting periods benefited
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CHAPTER 17 PROCESS COSTING 17-1 Industries using process costing in their manufacturing area include chemical processing‚ oil refining‚ pharmaceuticals‚ plastics‚ brick and tile manufacturing‚ semiconductor chips‚ beverages‚ and breakfast cereals. 17-2 Process costing systems separate costs into cost categories according to the timing of when costs are introduced into the process. Often‚ only two cost classifications‚ direct materials and conversion costs‚ are necessary. Direct
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materials are added uniformly so that multiple calculations of equivalent units are needed for each type of input. True False 11. The FIFO costing method recognizes that the work and costs carried over from the prior period legitimately belong to that period. True False 12. FIFO follows the job-order costing principle. True False 13. The FIFO method unit costs are used to value output that is related to future periods. True False 14. The weighted average method treats
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stated financial position of a company. Let’s take an example of my company McKesson. We are one of the United States largest drug distributors and we can carry a large amount of inventory at any one time. Under normal market conditions‚ using the FIFO method for recording inventory may be the prudent calculation and result in the highest stated revenues. However‚ if the price of a certain ingredient for a particular drug sky rockets because of a worldwide drought‚ then it would make more sense to
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Entry to record a change in depreciation methods. c 26. Disclosures required for a change in depreciation methods. c 27. Change from percentage-of-completion to completed-contracts. d 28. Disclosures required for a change from LIFO to FIFO. b 29. Change from FIFO to LIFO. c 30. Change in accounting estimate. a 31. Change in accounting estimate. b 32. Identify a change in accounting estimate. b 33. Change in accounting estimate. c 34. Identify a change in accounting estimate. d 35. Identify
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28. Sales during the first quarter were 1‚400 units at $75 per unit. The White Company uses a periodic inventory system. Using the White Company data‚ fill in the following chart to compare the results obtained under the FIFO‚ LIFO‚ and weighted-average inventory methods. FIFO LIFO Weighted Average Goods Available for Sale $82‚800 $82‚800 $82‚800 Ending Inventory‚ March 31 20‚000 16‚400 18‚400 Cost of Goods Sold 62‚800 66‚400 64‚400 3. Perpetual inventory system: journal entries. At the beginning
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businessmen‚ the inventory is the key to generate revenue for their business and also inventory can be counted as major investment businesses in their daily routine. Thus‚ the inventory should be managed under proper inventories valuation method which is FIFO ‘first in first out’ and WAC ‘weighted average cost’ method that we study in this syllabus. Definition Inventory is an asset of a company which can be categorize into raw material which act as an unprocessed material‚ work in process which is
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