ACCT 200 1st Edition Lecture 13 Outline of Last Lecture I Miscellaneous Notes II BE 6 3 III FIFO LIFO Weighted Average Cost IV BE 6 4 6 5 6 6 6 8 V Inventory Purchases VI Sales Journal Entry Outline of Current Lecture I E 6 4 II E 6 7 III COGS IV E 6 12 V Miscellaneous Current Lecture Jun 1 begin inventory Jun 12 purchase Jun 24 purchase Jun 27 purchase TOTAL Sold End inventory on hand Units 16 10 12 10 48 30 18 unit 250 240 231 5 245 n a total 4000 2400 2778 2450 11 628 E 6 4 FIFO Jun 1 Jun 12 Jun 24 Jun 27 TOTAL Sold 16 250 4000 10 240 2400 4 231 5 926 7326 value of COGS On Hand 8 231 5 1852 10 245 2450 4302 value of end inventory LIFO Sold Jun 1 Jun 12 Jun 24 Jun 27 8 240 1920 12 231 5 2778 10 245 2450 On Hand 16 250 4000 2 240 480 TOTAL 7148 value of COGS 4480 value of end inventory Average Cost 11 628 48 242 25 avg cost unit 30 242 25 COGS 18 242 25 end inventory E 6 7 Purchase books on acct for 2300 terms 2 10 net 30 5 2 Inventory 2300 Acct payable 2300 Pay freight charges on 5 2 purchase 100 5 2 Inventory 100 Cash 100 Freight in getting purchases always part of inventory freight out to customers always delivery expense Return 300 books 5 3 Acct payable 300 Inventory 300 Pay full balance due 2300 300 2000 within discount period so 2000 02 40 discount 5 10 Acct payable 2000 Cash 1960 Inventory 40 Discounts on purchases of inventory reduce inventory definitely will be on exam Sell books for 300 cost is 2060 2000 40 discount 100 freight 5 15 Acct receivable 3000 Revenue 3000 COGS 2060 Inventory 2060 If customer pays and takes discount 5 20 Cash 2940 Sales discount 60 Acct receivable 3000 COGS Begin inventory purchase purchase returns purchase discount freight charges end inventory COGS E 6 12 Sales revenue Gain on sale of land Selling expenses General expenses 250 000 100 000 50 000 20 000 COGS 180 000 Admin expenses 30 000 Multi Step Income Statement Sales revenue 250 000 sales returns discounts 0 Net sales 250 000 COGS 180 000 Gross profit 70 000 Expenses Selling 50 000 Admin 30 000 General 40 000 Total expenses 120 000 Operating income gross profit total expenses 70 000 120 000 50 000 operating loss gain on land sale 100 000 interest income 0 interest expense 0 Income before taxes operating income 100 000 50 000 Income tax expense 20 000 Net income 30 000 Miscellaneous What is NOT included in operating expenses Gain loss on sale of e g land Interest income revenue Interest expense Non operating items income tax expense Inventory value changes example iPhone 4 value goes down when iPhone 5 comes out Take loss right away If inventory falls below cost change to market value
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