【導(dǎo)讀】a).Goodsintransit. Consignedgoods. Publicwarehouses. Installmentsales. indicatedas.@theseller’sexpense.

　　

【正文】 P F/S a) Based on the assumption that the most recent costs should be matched with current revenues b) INV END is presumed to consist of the goods acquired first c) In periods of rising prices, results in lower INV END, higher COSG, and lower NI, lower tax liability d) Ine manipulation – intentionally reducing purchases/production to use old layers at lower costs (. LIFO liquidation) C Inventory CostFlow Method COGS most approx recently current costs 57 6. LastIn, FirstOut (LIFO) f) LIFO layer container illustration INV END @ base year Layer 1 @ Layer 2 @ Purchases @ varying costs COGS (LIFO) ? If INV END INV BEG, additional layer is added Layer 3 @ C Inventory CostFlow Method 58 6. LastIn, FirstOut (LIFO) f) LIFO layer container illustration INV END @ base year Layer 1 @ Layer 2 @ Purchases @ varying costs COGS (LIFO) ? If INV END INV BEG, the most recent layer(s) was removed C Inventory CostFlow Method 59 6. LastIn, FirstOut (LIFO) During its first year of operations, Helix Corp has purchased all of its inventory in 3 separate batches. Batch 1 was for 4,000 units @ $ per unit. Batch 2 was for 2,000 units @ $ per unit. Batch 3 was for 3,000 units @ $ per unit. 4,000 units in total were sold, 3,000 after the first purchase and 1,000 after the second purchase. What are the amount of INV END and COGS using LIFO method and the periodic and perpetual system? C Inventory CostFlow Method g) Example 60 6. LastIn, FirstOut (LIFO) Periodic system: Units bought Cost per unit INV END Goods available for sale 4,000 2,000 3,000 $ $17,000 4,500 $17,000 9,000 14,250 $40,250 INV END = $17,000 + $4,500 = $ 21,500 COGS = $40,250 $21,500 = $18,750 $21,500 C Inventory CostFlow Method g) Answer 61 6. LastIn, FirstOut (LIFO) Perpetual system: 4,000 2,000 3,000 $ $12,750 4,500 $17,250 INV END = $ 23,000 COGS = $12,750 + $4,500 = $17,250 Units Bought Units Sold Cost / Unit INV Change INV Balance COGS (3,000) (1,000) $17,000 (12,750) 9,000 (4,500) 14,250 $4,250 13,250 8,750 $ 23,000 C Inventory CostFlow Method g) Answer 62 7. DollarValue LIFO ? Under regular LIFO method, inventory is measured in units and is priced at unit prices ? Under dollarvalue LIFO method, inventory is measured in dollars and adjusted for changing price levels (. seek to determine the real dollar change in inventory) ? When converting from LIFO inventory to dollarvalue LIFO, a price index will be used to adjust the inventory value (internally puted or supplied) a) Regular LIFO method vs. Dollarvalue approach Price index = INV END @ current year cost INV END @ base year cost C Inventory CostFlow Method 63 7. DollarValue LIFO ? A LIFO pool can contain all of the inventory items for a natural business unit, or group similarly used inventory items into several groups or pools ? The cost of keeping inventory records is less under dollarvalue LIFO b) Applies to pools of inventory items rather than to individual items c) LIFO conformity rule also applied ? Once LIFO is used for tax, it must also used for external F/S C Inventory CostFlow Method ? Involuntary liquidation of LIFO layers is less likely to occur because if the level of one item decreases it can be offset by increases in the levels of other items 64 7. DollarValue LIFO d) How to determine Dollarvalue LIFO INV END @ Base year costs Add: ∑ (Add Layers @ base year costs X Price index) INV END @ dollarvalue LIFO Price index = INV END @ current year cost INV END @ base year cost INV END @ base year cost Less: INV BEG @ base year cost Add Layer @ base year cost C Inventory CostFlow Method ① ② ① ② 65 7. DollarValue LIFO e) Example where price index to be internally puted Brock Co. adopted the dollarvalue LIFO inventory method as of 01/01/year 1. A single inventory pool and an internally puted price index are used to pute Brock’s LIFO inventory layers. Information about Brock’s dollarvalue inventory follows: Date At base year cost At current year cost At dollarvalue LIFO 01/01/year 1 Year 1 layer 12/31/year 1 Year 2 layer 12/31/year 1 $40,000 5,000 $45,000 15,000 $60,000 $40,000 14,000 $54,000 26,000 $80,000 ? C Inventory CostFlow Method 66 7. DollarValue LIFO e) Answer: Step 1: pute price index Year 1 price index = Date At base year cost At current year cost At dollarvalue LIFO 01/01/year 1 Year 1 layer 12/31/year 1 Year 2 layer 12/31/year 1 $40,000 5,000 $45,000 15,000 $60,000 $40,000 14,000 $54,000 26,000 $80,000 ? $54,000 $45,000 = 6/5 Step 2: pute LIFO layer added Year 1 LIFO layer added = $5,000 X 6/5 = $6,000 Step 3: pute INV END Year 1 INV END = $40,000 + $6,000 = $46,000 C Inventory CostFlow Method 67 7. DollarValue LIFO e) Answer: Step 1: pute price index Year 2 price index = Date At base year cost At current year cost At dollarvalue LIFO 01/01/year 1 Year 1 layer 12/31/year 1 Year 2 layer 12/31/year 1 $40,000 5,000 $45,000 15,000 $60,000 $40,000 14,000 $54,000 26,000 $80,000 ? $80,000 $60,000 = 4/3 Step 2: pute LIFO layer added Year 2 LIFO layer added = $15,000 X 4/3 = $20,000 Step 3: pute INV END Year 2 INV END = $46,000 + $20,000 = $66,000 C Inventory CostFlow Method 68 7. DollarValue LIFO f) Example where price index supplied Walt adopted the dollarvalue LIFO inventory method as of 01/01/year1 Walt’s entire inventory constitutes of a singe po