FAR 9 Inventory

Question 1

Steps for LIFO lower of cost or market

Answer 1

1, take middle from MV
2, cost vs MV

Ceiling = NRV (Selling - disposal)
Floor = NRV - Profit Margin
Replacement (usually given)

Question 2

Steps for FIFO lower of cost or market

Answer 2

Cost vs NRV

Question 3

Diff btw Weighted Avg and Moving Avg

Answer 3

w: すべてのコスト÷　すべてのユニット
M：Salesがあるごとに、その前の在庫の平均を求める

Question 4

Steps for Dollar Value LIFO

Answer 4

1. Price Index ( current year ending / current ending, in base year)
2. base year + PI * (Current end by - current end last year)
3. if more than one year, do it one year by one year

Question 5

Conventional Retail Method

Answer 5

1. find rate
   ( GAFS for cost / GAFS for retail)
   GAFS = Beg, purchase, markup
2. find ending inventory for retail
3. 2 times rate = cost ending balance

Question 6

Periodic vs Perprtual

Answer 6

Periodic: assume all transaction occurred at the end of the year

Perpetual: Calculate cost everytime transaction occurs

Question 7

Shipping cost is covered by (seller? buyer?)
1. FOB shipping point
2. FOB distination

Answer 7

1. cost is covered by buyer ( title transfer at the shipping)
2. cost is covered by seller (t.t. at reception)

Question 8

Who has the inventory posession for cosigned inventory kept in cosignee?

Answer 8

Cosignor

Question 9

Ending Inventory balance has ____ relation ship with COGS (under.overstatement)

Answer 9

Inverse
- if end is overstated, COGS is understated, but NI is overstated (direct relationship)

Question 10

2 ways in cash discount
1. gross profit method
2. net method

Answer 10

1. take disc off when occurred
2. assume disc 100% occurred (disc subtracted at the beginning)

Question 11

CGAFS is calculated by

Answer 11

COCGS + Ending Balance

Question 12

Goods held on consignment means

Answer 12

Goods provided by provider
Has to be removed from Balance sheet

Question 13

Freight out cost is a part of inventory cost

Answer 13

No. this is cost inccurs after sale of inventory

Question 14

DVLIFO　立式

Answer 14

（Base yｒ基準の変化額）*(price index)

price index = current yr cost/ base yr cost

Question 15

Lower of Mkt Fifo
how much?
fifo basis 400k
selling price 408k
cost of disposal 20k
profit margin 60k
replacement cost 360k

Answer 15

388K (NRV)

Question 16

How much is selling cost

purchase price of A 100k
fright -in cost 10k
fright-out cost 20k

Answer 16

20k

fright-in => inventory not selling cost

Question 17

How much inventory shuold be recorded at the year end

inv cost 100k
advertise 50k
shipping 20k

Answer 17

120k
advertise =not included

Question 18

GAFS formula

Answer 18

B + P + freight-in

GASF - COGS = INV