IFA36 – FIFO Inventory Valuation (Perpetual System) – Intermediate Accounting

Download the Workbook: http://www.tonybell.com Unlock 100+ Members Accounting Tutorials: https://www.youtube.com/channel/UCNFClg6mzfZ5ixpuH9c7f1A/join In This Video: We work through Problem 8-2A, focusing on the First-In, First-Out (FIFO) inventory costing method. Using a month of purchases and sales for ABC Company, we calculate Ending Inventory, Cost of Goods Sold (COGS), and Gross Profit under a Perpetual inventory system. We then switch gears and run the same calculations under a Periodic inventory system to compare the results. For both systems, we prepare the required journal entries and tackle a bonus scenario where a physical count reveals missing units (shrinkage), requiring specific year-end adjusting entries. Module Overview (IFA35–IFA41): This module explores Inventory valuation and tracking in depth. We will examine complex cost flow assumptions, analyze the impact of inventory errors, and apply valuation rules like Lower of Cost and Net Realizable Value (LCNRV). We will also cover inventory estimation techniques, such as the gross profit method and the retail inventory method, while highlighting key differences between US GAAP, IFRS, and ASPE.