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Chapter 6 (2) (Repaired)
Chapter 6 (2) (Repaired)
Chapter 6
Inventories
Merchandise inventory: includes all goods that a company owns and holds for
sale, regardless of where the goods are located when
inventory is counted.
Inventory systems
Perpetual Periodic
Inventory Inventory
System System
Note that :
4- Unlike, perpetual inventory system which computes the cost of goods sold
and ending inventory balance after each transaction.
2- FOB destination legal title to the goods remains with the seller
until the goods reach the buyer.
Multiple choice :
Note that :
Note that : to compute the ending inventory under any of these methods we
must use inventory equation in merchandising companies .
Note that :
The sum of Beg. Inv . and cost of goods purchased equals the cost
of goods available of sale " inventoriable costs "
Beg Inv + cost of goods purchased = ending inventory + cost of goods sold
Example :
Note that :
C ) Specific identification
Mar 20 4 800
1 0
Mar 500 4.5 2,250 20 4 800
10 0 4.5 2,250
50
0
Mar 15 4 600 50 4 200
15 0 4.5 1,575 15 4.5 675
35 2,175 0
0
50
0
Mar 400 4.75 1,900 50 4 200
20 15 4.5 675
0 4.75 1,900
40
0
Mar 50 4.5 225 50 4 200
25 35 4.75 1,662.5 10 4.5 450
0 1,887.5 0 4.75 237.5
40 50
0
Mar 300 5 1,500 50 4 200
30 10 4.5 450
0 4.75 237.5
50 5 1,500
30
0
Total 1,20 $5,650 90 $4,062.5 50 $2,300
0 0 0
30 0 8 1,500
30 5 2,424
0 4.48
50 4
0
Total 1,20 $5,65 90 $402 50 4.84 $2,42
0 0 0 6 0 8 4
Weight average cost per unit = cost of goods available for sale
No . of units available