Well explained video, thank you! I just have one question: at 27:48, when using LIFO, why do rising costs make COGS decreases? Isn't it increasing because we are using most recent inventories?
the beginning inventory was 5000 units at a cost of $5.00, which is $5,000, in January 10th the company made a purchase of 1000 units at a cost of $6.00 (1000 units x $6.00 = $6,000.00) so the inventory available for sale in units is 6000 and inventory available for sale in USD is $11.000.00( beginning inventory $5000+ new purchase $6000= $11,000.00)
@@Cesy-bg9ym I was confused when I saw that too. I think it may have been a typing error. That balance should be 31,000. Either way, as long as the (unit * unit cost) part is correct you should still get the correct amount for EI at the end
@@elprofetadeallah3149 I was also confused, should it not be [ ($5 x 5000)+ ($6 x 1000)] = 31,000? How is inventory of 6000 units total less than when it was 5000.
❤️ from India your way to teach is really awesome
Glad you think so!
Well explained video, thank you! I just have one question: at 27:48, when using LIFO, why do rising costs make COGS decreases? Isn't it increasing because we are using most recent inventories?
very well explained Thank you!!
Thank you and please visit the website for more farhatlectures.com/ Start your free trial!
Many thanks for the video.
You are welcome! Please visit my website for more resources farhatlectures.com/
Great video! Quick question though, how did we get $11,000 in the balance section @18:23?
the beginning inventory was 5000 units at a cost of $5.00, which is $5,000, in January 10th the company made a purchase of 1000 units at a cost of $6.00 (1000 units x $6.00 = $6,000.00) so the inventory available for sale in units is 6000 and inventory available for sale in USD is $11.000.00( beginning inventory $5000+ new purchase $6000= $11,000.00)
@@Cesy-bg9ym I was confused when I saw that too. I think it may have been a typing error. That balance should be 31,000. Either way, as long as the (unit * unit cost) part is correct you should still get the correct amount for EI at the end
@@elprofetadeallah3149 I was also confused, should it not be [ ($5 x 5000)+ ($6 x 1000)] = 31,000? How is inventory of 6000 units total less than when it was 5000.
Very helpful lecture.
BTW, Jalol was here
Thanks and welcome. Here's my intermediate accounting course: farhatlectures.pathwright.com/library/?category=Intermediate+Accounting
Professor you made a mistake in 28:15 if costs are rising under lifo cogs will be high net income low and lower taxable income
The arrow direction is incorrect. Higher COGS, Lower NI, and lower taxes. TY
under the fifo perpetual how is the first 11,000 computed? I get every other number but that one is not adding up to me
I think it's supposed to be 31,000
Professor how to deal with purchase return if any?
See this playlist. th-cam.com/play/PLxP0KZzCGFYNaDLj7lxTZcYDnge3pTZFl.html Please connect with me: linktr.ee/farhatlectures