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Tute 6

The document outlines the schedule for in-semester consultations and details regarding Assessment 2 for the ACB1120 course, emphasizing the importance of checking student emails for business transactions. It also covers key concepts related to inventory accounting, comparing perpetual and periodic inventory systems, and includes cautionary notes on credit terms and discounts. Additionally, it provides a tutorial structure and examples of journal entries related to inventory management.

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fuyunshen
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7 views33 pages

Tute 6

The document outlines the schedule for in-semester consultations and details regarding Assessment 2 for the ACB1120 course, emphasizing the importance of checking student emails for business transactions. It also covers key concepts related to inventory accounting, comparing perpetual and periodic inventory systems, and includes cautionary notes on credit terms and discounts. Additionally, it provides a tutorial structure and examples of journal entries related to inventory management.

Uploaded by

fuyunshen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ACB1120

Week 6 tutorial

Michelle Song
Email: chenlan.song@monash.edu

In-semester consultation
• starts in week 2 and ends in week 12
• Wednesday 3.30 – 5pm via Zoom
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Assessment 2
Assessment 2 – Manual assignment
• Check your Monash student email and make sure you have received business transactions for Assessment 2
Lecture 6 revision
Start looking at AASB standards (measurement issue)– AASB102 Inventory
Income statement
There are two systems to account for inventory/purchases & therefore COGS:

1. Perpetual Inventory System


• Initially records inventory as an asset – Inventory account
• The amount of inventory that should be on hand is known at all times
• COGS is updated at the time of every sale
• At the end of a period, need to determine stock loss/gain by physical
counts

2. Periodic Inventory System


• Initially records inventory as an expense – Purchases account
• Inventory on hand and COGS are known only after a physical count
• Cannot determine whether there is an inventory shortage/gain

Cost of sales = Cost of goods sold (COGS)


Lecture 6 revision

Caution: when cash is paid later, always check credit terms  discount received/revenue (I)
Caution: when cash is received later, always check credit terms  discount expense (E)
Caution:  accounts receivable, cash received and hence discount expense
Close Inventory (bal.op), purchases
(E), purchases return (-E) to COGS

Close COGS to Inventory (bal.end)


Tutorial structure • Assessments (5 + 10 minutes)
• Lecture recap (10 minutes)
Q1 Credit terms – discount received • For more information, please watch the
lecture recordings on Moodle.
Q2, Q3, and Q5 Periodic inventory
system vs. Perpetual inventory • Discuss Q1 and Q3 (5 + 15 minutes)
system • Unless you prefer another question
• Solutions to all questions will be available
Q4 Perpetual inventory system, on Moodle after Friday 6pm.
including discount
• Group discussion – Q5 (20 minutes)
• Students voluntarily form a group of 3-4
students

• Group reporting (10 minutes)


• One group presents their discussion to the
class

• Wrap up (2 minutes)
Q1 Q4.6 (p.219)

What do ‘credit terms 2/7, n/30’ mean?


2% discount if the full payment is made with 7 days from the date of purchase
If a payment is made between day 8 to day 30, not discount
Pay no later than day 30 from the date of purchase

24 July
Dr Accounts payable $4,480 - $280 = $4,200
Cr Discount received $4,200 x 2% = $84
Cr Cash $4,200 - $84 = $4,116
Bal.op = 600 x $400 = $240,000

Periodic:
Calculate COGS

Perpetual:
Calculate stock gain/loss
Answer all parts of a question
1. Journal entries
2. Calculate COGS
Periodic inventory system

Perpetual inventory system


Periodic inventory system

Perpetual inventory system


Periodic inventory system

Perpetual inventory system


Periodic inventory system

Perpetual inventory system


Periodic inventory system

Perpetual inventory system


Periodic inventory system
Perpetual inventory system
Stock gain or stock loss?
Stock gain: actual stock > expected stock
Stock loss: actual stock < expected stock
Actual stock?
Expected stock on the accounting book?
600 – 60 – 400 + 800 + 20 – 100 = 860
Stock loss: 830 < 860
Stock loss: 30 @ $400 each = $12,000
How much is COGS?
Why different?
Perpetual inventory system

Periodic inventory system


Perpetual inventory system

Periodic inventory system


Perpetual inventory system

Periodic inventory system


Perpetual inventory system

Periodic inventory system


Perpetual inventory system
Stock gain or stock loss?
Stock gain: actual stock > expected stock
Stock loss: actual stock < expected stock
Actual stock?
Expected stock on the accounting book?
$84,000 - $800 + $120,000 - $24,000 = $179,200
Stock loss: $178,000 < $179,200
Stock loss = $1,200
Periodic inventory system
The difference is $1,200
Lecture 6 wrap up
Perpetual vs. Periodic inventory systems

• Inventory accounts vs. Purchases and Purchases return accounts

• Record COGS as inventory is sold and returned vs. calculate


COGS at the end of a period

• Record inventory gain/loss vs. not able to know if there is an


inventory gain/loss

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