財務(wù)會計概念與應(yīng)用英文版lectu(1)-資料下載頁
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【正文】 Cost Ceiling A 34 20 32 30 B 42 32 36 46 C 52 44 42 62 D 38 50 32 68 ? Define market value as: ? Replacement cost, if it falls between the ceiling and the floor. ? The floor, if the replacement cost is less than the floor. ? The ceiling, if the replacement cost is higher than the ceiling. ? When replacement cost, ceiling, and floor are pared, market is always the middle value. Compare the defined market value with the original cost and choose the lower amount. 23 Using LCM ? LCM can be applied in three ways. – By puting cost and market figures for each item of inventory and using the lower of the two figures in EACH case. – By puting cost and market figures for the total inventory and then applying the LCM rule to that TOTAL. – By applying the LCM rule to categories of inventory. 24 Gross Margin Method ? Gross Margin Method – Used when a physical count of inventory is impossible or impractical. – Cost of goods sold and ending inventory are estimated using available information: ? Beginning inventory. ? Purchases. ? Historical gross margin percentage. 25 Gross Margin Method Example ? Orem Industries has sales for January 1 to March 31 of $100,000 and purchases of $65,000. Inventory on January 1 was $15,000 and the pany has a historic gross profit percentage of 40%. Dollars % of sales Net sales revenue $100,000 100% Cost of goods sold: Beginning inventory $15,000 Purchases 65,000 Total available for sale $80,000 Ending Inventory (3) 20,000 Cost of goods sold (2) 60,000 60% Gross margin (1) $ 40,000 40% (1) $100,000 X .40 (2) $100,000 $40,000 (3) $80,000 $60,000 Assignment ? Discussion questions ? Practice exercises: 1,2,3,4,16,17,18 26
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