Explain how to estimate the average cost of inventory when using the retail inventory method.

Q: Identify the costs of merchandise inventory.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Discuss the factors affecting a company’s choice of inventory method

A: An inventory valuation allows a company to provide a monetary value for items that make up their…

Q: Estimate ending inventory and cost of goods sold using the gross profit method.

A: Under gross profit method, calculation of cost of goods sold: Cost of goods sold = Sales* ( 1 -…

Q: Explain the LIFO retail inventory method.

A: LIFO: Under this inventory method, the units that are purchased last, are sold first. Thus, it…

Q: How do I use FIFO and calculate the Cost of Goods and inventory ?

A: FIFO Method: FIFO method also referred to as First-In-First-Out method is an inventory management…

Q: What is the formula used to determine the amount of merchandise inventory to be purchased?

A: To calculate amount of merchandise inventory to be purchased, we need opening inventory amount,…

Q: The entry to record inventory shrinkage under a perpetual inventory system would include a debit to:…

A: Explanation: When There is Inventory shrinkage Under the perpetual inventory system The following…

Q: From the information provided below can you please complete the given table using the FIFI method of…

A: Under FIFO Method, units which came in first will be issued first and the inventory will be out of…

Q: In the Perpetual/Periodic Inventory System what are the merchandise inventory and Income summary?…

A: Perpetual inventory: Under perpetual inventory system each transaction for purchase of inventory,…

Q: By following the LIFO process calculate the Ending inventory value.

A: Introduction: LIFO: LIFO stands for Last in First out. Which means last received inventory to be…

Q: How to determine the inventory cost using the fifo and lifo

A: Inventory cost is the cost to incur handling charges,maintaining cost and storage cost with…

Q: What account is debited when recording a purchase of inventory when using the perpetual inventory…

A: Perpetual inventory system: The method or system of maintaining, recording, and adjusting the…

Q: Determine the costs assigned to ending inventory and to cost of goods sold using LIFO

A: LIFO:   LIFO is commonly known as Last In, First Out. LIFO is one of inventory management method. In…

Q: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: At what amount will the inventory and cost of goods sold amounts be reported on the financial…

A: As per the accounting standards, the closing inventory must be reported at lower of cost or net…

Q: Determine ending inventory using the dollar-value LIFO inventory method.

A: Dollar-value LIFO method: In this method, the valuation of inventory is calculated on the monetary…

Q: What is the method of accounting of inventory in which the cost of goods is recorded each time a…

A: The cost of goods included the cost of goods that are sold during the period.

Q: What does the cost of merchandise inventory includes?

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.

A: Lets start with basic understanding. There are two system for inventory valuation which are, (1)…

Q: Consider each of the following independent situations. Should a company report the goods in its…

A: If the seller expects a sales return, then it should debit sales return and credit refund liability…

Q: compute the ending inventory using the retail method. Explain the steps that you would use in…

A: Inventory is the good which are the products which company have for the purpose of sale by the…

Q: Determine ending inventory by applying the retail inventory method.

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: of goods sold for the FIFO and the LIFO method based on the information

A: FIFO stands for First in first out . It means the inventory which is purchased first will be sold…

Q: What does the retail inventory estimates?

A: Retail inventory method:   The retail inventory method is used to calculate the value of ending…

Q: The retail inventory method would include which of the following in the calculation of the goods…

A: An accounting method which is being used for the purpose of measuring the merchandise in the store…

Q: Explain how inventory is used and understand what it costs.

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: Compute the correct amount of inventory.

A: Inventory is the stock which the company has in order to sell them in the normal course of the…

Q: Explain the types of inventory and the differences between a perpetual inventory system and a…

A:

Q: Under a perpetual inventory system, what are the four inventory costing methods and how does each…

A: Definition:

Q: Describe the calculation of the cost of goods sold when using the periodic inventory system.

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Explain the gross profit method of estimating ending inventory.

A: Gross Profit: It refers to the difference between the sales and the cost of goods sold.

Q: What is the inventory system called that continuously discloses the amount of inventory? Group of…

A: Solution: Under perpetual inventory system, inventory records are updated with each receipt and…

Q: What financial statement is merchandise inventory reported on, and in what section?

A: Merchandise Inventory is reported on the Balance sheet of the company under current assets section.…

Q: Explain the retail inventory method of estimating ending inventory.

A: Retail inventory method takes into account all the retail amounts that is, the current selling…

Q: Explain the difference between the retail inventory method using LIFO and the dollar-value LIFO…

A: LIFO: Under this inventory method, the units that are purchased last, are sold first. Thus, it…

Q: nventory valuation is used to calculate the cost of goods sold and cost of ending inventory. The…

A: First in First out Method This is one of the popular method of inventory valuation.  While using…

Q: What is the treatment of the following items in connection with the retail inventory method? a.…

A: Retail Inventory method is a methodology to calculate the ending value of the inventory of the…

Q: How do you find an inventory report for manufacturers?

A: Answer :- The inventory of manufacturer is reported in "Current assets" part of the balance sheet of…

Q: The inventory valuation method which assumes that the items purchased first are the first items to…

A: Valuation of an inventory depends upon which items are sold first in the inventory cycle. This gives…

Q: What is accounting for merchandise inventory?

A: (1) The Merchandise Inventory is one type of the Account that exists on the Balance Sheet. This…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.