However, if inventory items are acquired at different costs, which cost is moved from asset to expense? At that point, a cost flow assumption must be selected by company officials to guide reporting. That choice can have a significant impact on both the income statement and the balance sheet. It is literally impossible to analyze the reported net income and inventory balance of a company such as ExxonMobil without knowing the cost flow assumption that has been applied. Question: An example is probably the easiest approach by which to demonstrate cost flow assumptions. Assume a men’s retail clothing store holds $120 in cash. On October 26, Year One, one blue dress shirt is bought for $50 in cash for resell purposes. Later, near the end of the year, this style of shirt becomes especially popular. On December 29, Year One, the store’s manager buys a second shirt exactly like the first but this time at a cost of $70. Cash on hand has been depleted completely ($120 less $50 and $70) but the company now holds two shirts in its inventory. Then, on December 31, Year One, a customer buys one of these two shirts by paying cash of $110. Regardless of the cost flow assumption, the company retains one blue dress shirt in inventory at the end of the year and cash of $110. It also reports sales revenue of $110. Those facts are not in doubt.
no fax cash advance
quick loan chattanooga
speedy cash loans san antonio tx
cash advance san antonio
payday loan scams oregon
cashadvancenow
payday loans nevada laws
payday loan san jose ca
payday loans colorado springs yellow pages
payday loans ludington mi
payday loan llc san diego
payday loans jefferson city mo
cash advance las vegas casinos
payday loans for arkansas residents
online loans texas no credit check
payday loan south san francisco
one hour loan
payday loan idaho
payday loan apr
loans in california
From an accounting perspective, two questions are left to be resolved (1) what is the cost of goods sold reported for the one shirt that was sold and (2) what is the cost remaining in inventory for the one item still on hand? In simpler terms, should the $50 or $70 be reclassified to cost of goods sold; should the $50 or $70 remain in ending inventory? For financial accounting, the importance of the answers to those questions cannot be overemphasized. What are the various cost flow assumptions and how are they applied to inventory?
unsecured personal loans rates
cash loan places online
loan express cash
bad credit personal loans guaranteed approval 5000
need money today
24 hour cash loan las vegas
payday advance loans online direct lenders
best payday loans reviews
louisiana online payday loan laws
payday loans delaware state
payday loans dublin georgia
payday loans crestwood il
bbb payday loans
cash loans anniston alabama
fast bad credit loans monthly payments
private personal loans bad credit
cash loans 77090
payday loans lynnwood washington
cash personal loans
payday loans canada
quick online loans no credit checks
personal loan unsecured
free online loans
new south carolina payday loan laws
personal loans comparison
cash loans portland maine
cash loans now
personal loan chicago il
payday loan consolidation michigan
payday loan relief

 

Contact

Payday Loans

© 2015 All rights reserved.

Make a free websiteWebnode