Ending inventory price

Elliotbay

when calculating ending inventory do you use purcahse costs or sales price?

RobertA

Can you expand more on that please?

From the curriculum, the equation is
Beginning inventory + Purchases - COGS = Ending inventory

nitoha

babycakes Wrote:
-------------------------------------------------------
> when calculating ending inventory do you use
> purcahse costs or sales price?

Depends on the cost flow assumptions used. For a GAAP company, FIFO/LIFO/AVCO is used to value the ending inventory and COGS (Of course the purchase price is used in each case)

koba

inventory = lower of cost (purchase cost) or net realizable value (expected net sales price). the cost of course depends cost flow assumption used.



Edited 1 time(s). Last edit at Sunday, November 28, 2010 at 11:06PM by oz001.