LIFO VERSUS FIFO: UPDATING WHAT WE HAVE LEARNED Nicole Thorne Jenkins Doctoral Student in Accounting Morton Pincus Associate Professor of Accounting College of Business Administration The University of Iowa 108 PBAB Iowa City‚ IA 52242-1000 U.S.A. 319/335-0915 FAX 319/335-1956 morton-pincus@uiowa.edu September 1998 (version 1.2) LIFO VERSUS FIFO: UPDATING WHAT WE HAVE LEARNED 1.0 INTRODUCTION The statutory mandate in U.S. tax law that firms using the last-in first-out (LIFO) inventory
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FIFO and LIFO accounting Methods are accounting techniques used in managing inventory and financial matters involving the amount of money a company has tied up within inventory of produced goods‚ raw materials‚ parts‚ components‚ or feed stocks. FIFO stands for first-in‚ first-out‚ meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact newest physical object has been tracked and sold; this is just an inventory technique. LIFO stands for last-in
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10 units of inventory that cost a total of $190. During June‚ Amazon purchased and sold goods as follows: June 8 Purchase 30 units @ $20 June 14 Sale 25 units @ $40 June 22 purchase 20 unit @ $22 June 27 Sale 30 unit @ $40 Requirements: Under the FIFO and LIFO method 1. How much is Amazon’s cost of goods sold 2. How much is Amazon’s gross profit or loss 3. Journalize all Amazon’s inventory transactions for June. 4. Which method maximizes gross profit? Q2: Collins Industries’ inventory records show
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MEHJABEEN SUBMITTED ON: 30/ 04/ 2012 FIFO [ FIRST IN FIRST OUT ] | ADVANTAGES | DISADVANTAGES | * If the business trades perishable goods with the use of FIFO it can avoid obsolescence of stock. * Closing stock valuation is done upon the most recent prices paid for stock which takes into account the rate of inflation. * The method is more realistic as the inventory is issued in the order in which they have been received. * FIFO is acceptable method of inventory valuation
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LIFO‚ last-in-first-out and FIFO‚ first-in-first-out the two most common inventory accounting methods. The choice of the method of inventory accounting by a small business can directly impact its balance sheet‚ income statement‚ and statement of cash flows. Not only do companies have to track the number of items sold‚ but they have to track the cost of each item. These two methods are ways in which they can do that. Each will have a different effect on their financial statements. How is Inventory
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FIFO and LIFO Inventory Methods Tonia Green Accounting 211 – Financial Accounting Excelsior College FIFO and LIFO Inventory Methods This paper will provide a comparison of the accounting implications of valuing inventory under the First-in‚ First-out (FIFO) and Last-in‚ First-out (LIFO) methods. With very few exceptions‚ every business depends on an inventory to operate. Whether the business provides a service or sells products to its consumers‚ supplies and stock are required to operate
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The Advantage In Technology Technology is the electric machines and systems that most people use daily. Technology has developed a lot during those years‚ and two important devices that most people use daily are the cellular and computer. The strongest advantage that technology can bring us is the much easier communication‚ and entertainment
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ADVANTAGE OF HAVING TWO MONTHS PRIOR TO YOUR SEMINAR * The advantage in preparing your seminar in two months prior to your seminar is that you can prepare everything with excellence because you have a lot of time to prepare. * You have a lot of time to locate a good venue‚ decide a design so that can capture the audience interest by seeing the area so relaxing and refreshing. * Whatever food you plan to fix‚ try to keep to the middle of the road in your selections of what to fix. Think
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everything in life‚ both chain and independent restaurants come with advantages and disadvantages; however‚ they both possess common factors such as growth‚ economic sales and development. Pertinent to the success of chain and independent restaurants is site selection. Because chain restaurants have more resources including the ability to retain realtors that specialize in real estate growth and development‚ they have an advantage. Though chain restaurants have the funding to hire experts in
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Competitive Advantage ”A company can outperform its rivals only if it establishes a difference that it can reserve”. - Michael Porter The unique skills and assets a company has to outperform its rivals are the sources of competitive advantage. The competitive advantage results from implementing a value creating strategy that is not implemented simultaneously by its competitors. The strategy attains sustainability if the competitors are unable to erode the strategic advantage the company has
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