Specific Identification Method
Specific Identification MethodÂ
1. Â Â Refers to the association of costs with their assumed flow.
2. Â Â Has the objective of matching costs of the period against revenues for the period.
3. Â Â Requires that the inventory be written down to the lower value and that a loss be recorded.
4. Â Â Refers to the actual physical movement of goods in the operations of a company.
5. Â Â Related to the lower-of-cost-or-market (LCM) rule.
6. Â Â Can vary depending on the assumptions about the flow of costs.
Se2. Assume the following data with regard to inventory for Vegan Company:
Aug.     1     Inventory
40 units @ $10 per unit
$Â Â 400
8Â Â Â Â Â Purchase
50 units @ $11 per unit
550
22Â Â Â Â Â Purchase
35 units @ $12 per unit
420
Goods available for sale
125 units
$1,370
Aug.   15    Sale
28Â Â Â Â Â Sale
45 units
25 units
Â
Inventory, Aug. 31
55 unitsÂ
Assuming that the inventory consists of 30 units from the August 8 purchase and 25 units from the purchase of August 22, calculate the cost of ending inventory and cost of goods sold.
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Answers
Status NEW
Posted 25 Apr 2017 03:04 PM
My Price 5.00
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