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 greater ending inventory value utilizing LIFO inventory system. The company would generate higher net income and increase the earnings. Also‚ LIFO could reflect
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DETERMINING THE COST OF MATERIALS An important area of materials accounting is the costing of materials requisitioned from the storeroom for factory use. The unit cost of incoming materials is known at the time of purchase. The date of each purchase is also known‚ but the materials on hand typically include items purchased on different dates and at different prices. Items that look alike usually are commingled in the storeroom. As a result‚ it may be difficult or impossible to identify an issue
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1(a) Paragon Electronics‚ INC. LIFO Purchases By Paragon Sold to Ending Inventory Cost of goods sold Year Units Unit cost($) Aero Inc Units Unit Cost($) Total($) Unit Unit Cost($) Total($) 1986 100 700 80 20 700 14‚000 80 700 56‚000 1987 100 800 110 10 700 7‚000 100 10 800 700 87‚000 1988 100 850 92 10 8 700 850 7‚000 6‚800 92 850 78‚200 1989 100 750 104 10 4 700 850 7‚000 3‚400 100 4 750 850 78‚400 1990 100 650 94 10 4
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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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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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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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Chapter 20 Accounting Changes and Error Corrections True / False Questions 1. Most‚ but not all‚ changes in accounting principle are reported using the retrospective approach. True False 2. Prior years’ financial statements are restated when the prospective approach is used. True False 3. The after-tax cumulative effect on income is no longer required for changes in accounting principles. True False 4. Most changes in accounting principle require
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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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IFRS vs. GAAP W2 Accounting 561 In the past‚ each country developed its own respective accounting standards and implemented them on a national scale. As the global economy emerged‚ markets converged and accounting systems became more dynamic and were made consubstantial in order to support off-shore business operations and alliances with foreign brands. In recent history‚ the US has made its accounting principles more congruent with that of the IFRS. One of the outstanding differences between
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Plagiarism Statement Declaration Form Semester : 2 Course Code and Title :ABFA 1023 FUNDAMENTALS OF ACCOUNTING Declaration We confirm that we have read and shall comply with all the terms and condition of TAR College’s plagiarism policy. We declare that this assignment is free from all forms of plagiarism and for all intents and purposes is our own properly derived work. We further confirm that the same work‚ where appropriate‚ has been verified by antiplagiarism Software ____________________________________
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