Ending inventory price

Elliotbay

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

nitoha

babycakes Wrote:
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> 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.

RobertA

Can you expand more on that please?

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