CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 19-1LESSON 19-1

Determining the Quantity of Merchandise Inventory

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

INVENTORY RECORDINVENTORY RECORD

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page 566

1. Write the stock number and description before the periodic inventory begins.

2. Write the actual count in the No. of Units on Hand column.3. Write the unit price and calculate the total cost after the

physical inventory is completed.

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

STOCK RECORDSTOCK RECORD page 567

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1. Purchase information2. Sales information3. New balance on hand

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

periodic inventory perpetual inventory inventory record stock record stock ledger

page 568

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 19-2LESSON 19-2

Determining the Cost of Merchandise Inventory

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

FIRST-IN, FIRST-OUT INVENTORY FIRST-IN, FIRST-OUT INVENTORY COSTING METHODCOSTING METHOD

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page 569

1. Total units on hand2. Units from the most recent purchase3. Units needed to equal the total units on hand4. Unit price times fifo units5. Total fifo cost

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

4. Units needed to equal total units on hand

LAST-IN, FIRST-OUT INVENTORY LAST-IN, FIRST-OUT INVENTORY COSTING METHODCOSTING METHOD page 570

1. Total units on hand

3. Units from the earliest purchase2. Beginning inventory units 5. Unit price times lifo units

6. Total lifo cost

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

3. Cost of ending inventory

WEIGHTED-AVERAGE INVENTORY WEIGHTED-AVERAGE INVENTORY COSTING METHODCOSTING METHOD

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page 571

2. Weighted-average price per unit

1. Total cost of inventory available

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

CALCULATING THE COST OF CALCULATING THE COST OF MERCHANDISE SOLDMERCHANDISE SOLD page 572

Cost ofMerchandise

Sold=

Fifo Cost of Ending

Inventory–

Cost ofMerchandiseAvailable for

Sale$634.00=$386.00–$1,020.00

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

COMPARISON OF INVENTORY COMPARISON OF INVENTORY METHODSMETHODS page 572

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

first-in, first-out inventory costing method last-in, first-out inventory costing method weighted-average inventory costing method

page 573

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 19-3LESSON 19-3

Estimating Inventory

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

GROSS PROFIT METHOD OF GROSS PROFIT METHOD OF ESTIMATING INVENTORYESTIMATING INVENTORY page 574

(continued on next slide)

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

GROSS PROFIT METHOD OF GROSS PROFIT METHOD OF ESTIMATING INVENTORYESTIMATING INVENTORY page 574

(continued from previous slide)

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LESSON 19-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERM REVIEWTERM REVIEW

gross profit method of estimating inventory

page 576