IFA40 – Weighted Average Inventory Valuation (Perpetual) – 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 Part A of Problem 8-4A, tackling the Weighted Average inventory costing method under a Perpetual inventory system (often called the Moving Average method). Using the purchase and sale data for ABC Company, we build a detailed perpetual inventory schedule, demonstrating how to recalculate a new average cost per unit immediately after every single purchase. We will use these moving averages to calculate Cost of Goods Sold (COGS) and Ending Inventory, and prepare the necessary journal entries for each transaction. Finally, we tackle the bonus scenario to adjust for inventory shrinkage after a physical count reveals 288 units instead of the expected 290. 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.