Week 5 Discussion 1

Question # 1

What are the journal entries for these transactions showing possible inventory cost flows?

1) Purchased, on credit 10,000 lbs. of mix at $.50 per lb.

2) Used 8,000 lbs. in production

3) A physical inventory of material reveals a shortage of 200 lbs.

4) Added $4,000 of direct labor and $2,000 of manufacturing overhead to production.

5) Completed production of $12,000 of finished good.

What are the balances in the Raw Material, WIP and Finished Goods?

Question#2

Do the inventory control systems of periodic inventory and perpetual inventory effect the measurement of inventory when we use LIFO or FIFO?

Question #3

What is the latest Accounting Standard Update (ASU) on Inventory (topic 330) issued by FASB?