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Inventory Cost Flow Analysis and LCNRV

The document outlines three cases of inventory cost flow methods: FIFO (both periodic and perpetual) and weighted average (periodic and perpetual), providing a framework for calculating ending inventory, cost of inventory, and cost of goods sold. Additionally, it discusses the lower of cost and net realizable value (LCNRV) for two products, detailing their selling prices, costs, and required calculations for reporting inventory. The document includes prompts for users to fill in specific financial figures based on the provided data.

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Jezza Mae Gomba Regidor
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10 views1 page

Inventory Cost Flow Analysis and LCNRV

The document outlines three cases of inventory cost flow methods: FIFO (both periodic and perpetual) and weighted average (periodic and perpetual), providing a framework for calculating ending inventory, cost of inventory, and cost of goods sold. Additionally, it discusses the lower of cost and net realizable value (LCNRV) for two products, detailing their selling prices, costs, and required calculations for reporting inventory. The document includes prompts for users to fill in specific financial figures based on the provided data.

Uploaded by

Jezza Mae Gomba Regidor
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INVENTORY COST FLOW

Case 1. Inventory Cost Flow FIFO (Periodic or Perpetual)

Units Unit cost Total cost Sales (in units)


Jan. 1 beginning balance 800 200 160,000
8 sale 500
18 purchase 700 210 147,000
22 sale 800
31 purchase 500 220 110,000

a. The ending inventory in units ? ________________


b. The cost of inventory?_______________________
c. Cost of goods sold?_____________________________

Case 2. Inventory Cost Flow Weighted Average (Periodic)

Using the data above. Compute the following using weighted average -periodic
a. The ending inventory in units ? ________________
b. The cost of inventory?_______________________
c. Cost of goods sold?_____________________________

Case 3. Inventory Cost Flow Weighted Average (Perpetual)

Units Unit cost Total cost


Jan. 1 beginning balance 800 200 160,000
8 sale (500) 200 100,000
Balance 300 200 60,000
18 purchase 700 210 147,000
Balance ? ? ?
22 sale (800) ? ?
Balance ? ? ?
31 purchase 500 220 110,000
? ?

a. The ending inventory in units ? ________________


b. The cost of inventory?_______________________
c. Cost of goods sold?_____________________________

LOWER OF COST AND NET REALIZABLE VALUE

1-2.) Mateo Company has two products in the inventory.

Product R Product S
Selling price 2,000,000 3,000,000
Materials and conversion costs 1,600,000 1,700,000
General administrative costs 300,000 800,000
Estimated selling costs 600,000 700,000

At the year-end, the manufacture of items of inventory has been completed but no selling costs have yet been incurred.

1.) What amount should be reported as inventory using the LCNRV individual approach?

2.) What amount should be reported as inventory using the LCNRV total approach?

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