Financial Accounting: An Integrated Statements Approach, 2nd Edition

Inventories

CHAPTER OUTLINE LEARNING GOALS IN-TEXT EXERCISES AND PROBLEMS

Inventory Classification for

Merchandisers and Manufacturers

Learning Goal 1:Identify the types of

inventory used by merchandisers and

manufacturers.

Exercises

6-1, 6-2, 6-17

Control of Inventory Learning Goal 2:Summarize and

provide examples of control

procedures that apply to inventories.

Exercises

6-3, 6-4

Inventory Cost Flow Assumptions Learning Goal 3: Describe three inven-

tory cost flow assumptions and how

they impact the income statement and

balance sheet.

Exercises

6-5 (spreadsheet), 6-6 (spreadsheet),

6-7 (spreadsheet), 6-8 (spreadsheet),

6-9, 6-10, 6-11 (spreadsheet)

Accounting Application Problems

6-1A (spreadsheet), 6-2A (spreadsheet),

6-3A (spreadsheet), 6-1B (spreadsheet),

6-2B (spreadsheet), 6-3B (spreadsheet)

Inventory Costing Methods Under

a Perpetual Inventory System

• First-In, First-Out Method


• Last-In, First-Out Method


• Average Cost Method


• Computerized Perpetual
  Inventory Systems

Learning Goal 4: Determine the cost of

inventory under the perpetual invento-

ry system, using the first-in, first-out;

last-in, first-out; and average cost

methods.

Exercises

6-5 (spreadsheet), 6-6 (spreadsheet),

6-7 (spreadsheet), 6-8 (spreadsheet),

6-9

Accounting Application Problems

6-1A (spreadsheet), 6-2A (spreadsheet),

6-1B (spreadsheet), 6-2B (spreadsheet)

Inventory Costing Methods Under

a Periodic Inventory System

• First-In, First-Out Method


• Last-In, First-Out Method

Learning Goal 5:Determine the cost of

inventory under the periodic inventory

system, using the first-in, first-out; last-

in, first-out; and average cost methods.

Exercises

6-10, 6-11 (spreadsheet)

Accounting Application Problems

6-3A (spreadsheet), 6-3B (spreadsheet)

Comparing Inventory

Costing Methods

• Use of the First-In, First-Out Method


• Use of the Last-In, First-Out Method


• Use of the Average Cost Method

Learning Goal 6:Compare and

contrast the use of the three inventory

costing methods.

Exercises

6-10, 6-11 (spreadsheet), 6-12

Valuation of Inventory at

Other Than Cost

• Valuation at Lower of Cost
  or Market


• Valuation at Net Realizable Value

Learning Goal 7:Determine the prop-

er valuation of inventory at other than

cost, using the lower-of-cost-or-market

and net realizable value concepts.

Exercises

6-13 (spreadsheet), 6-14

Accounting Application Problems

6-4A (spreadsheet), 6-4B (spreadsheet)

Quick Response Learning Goal 8: Describe how

inventories are being reduced through

quick response.

Exercises

6-15

Inventory Analysis and Interpretation Learning Goal 9: Determine and

interpret the inventory turnover

ratio and the number of days’

sales in inventory.

Exercises

6-16, 6-17, 6-18

chapter 6