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Session 7 Inventories-I

Session 7 Inventories-I. Inventories. Acquisition Carrying Method Cost Flow Assumptions Valuation. Types of Inventories. Merchandise--RM or FG Manufactured--RM, WIP & FG. Acquisition-When?. FOB Risk of loss Consignment. Acquisition-What?. Cost of: manufacturing acquisition

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Session 7 Inventories-I

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  1. Session 7 Inventories-I Intermediate Accounting I - Fall 2011

  2. Inventories • Acquisition • Carrying Method • Cost Flow Assumptions • Valuation Intermediate Accounting I - Fall 2011

  3. Types of Inventories • Merchandise--RM or FG • Manufactured--RM, WIP & FG Intermediate Accounting I - Fall 2011

  4. Acquisition-When? • FOB • Risk of loss • Consignment Intermediate Accounting I - Fall 2011

  5. Acquisition-What? • Cost of: • manufacturing • acquisition • storage • preparation • freight • taxes and fees • packaging Intermediate Accounting I - Fall 2011

  6. Carrying Method • Perpetual: BI + I - O = EI • “Inventory” • Periodic: BI + I - EI = O • “Purchases” Intermediate Accounting I - Fall 2011

  7. Cost Flow Assumptions • Averaging • Specific identification • FIFO • LIFO Intermediate Accounting I - Fall 2011

  8. FIFO and LIFO • Use under different carrying methods • LIFO conformity • LIFO disclosure • LIFO liquidations Intermediate Accounting I - Fall 2011

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