Instructions: This Assessment Addresses The Following Course

Instructionsthis Assessment Addresses The Following Course Objectives

Instructions This assessment addresses the following course objective(s): Calculate appropriate inventory and deprecation entries. Account for various transactions using industry-standard accounting software. This assignment will help understand the impact of different account methods on the income statement and balance sheet. Download AC216 Unit 1 Assignment 4 – Inventory Methods [Excel Spreadsheet] Follow the instructions found in the template Rename your spreadsheet adding your last name to the file name (Ex. AC216 Unit 1 Assignment 4 – Inventory Methods Name) Submit your completed spreadsheet Estimated time to complete: 2 hours Submit Excel Spreadsheet Assignment File(s):

Paper For Above instruction

This assignment centers on applying inventory and depreciation accounting principles to a series of transactions and scenarios, utilizing industry-standard accounting software to ensure accurate record-keeping and reporting. The core objective is to calculate appropriate inventory and depreciation entries, analyze the effects of different inventory valuation methods on financial statements, and properly account for transactions within an Excel spreadsheet as per the provided template.

Effective inventory management and depreciation accounting are essential components of financial reporting, impacting a company's income statement and balance sheet. Different inventory valuation methods, such as First-In, First-Out (FIFO), Last-In, First-Out (LIFO), and Weighted Average Cost, produce varying financial outcomes, influencing profitability, tax obligations, and asset valuation. Understanding these differences allows accounting professionals to select the most appropriate method according to business operations and regulatory standards.

The process begins with downloading the provided Excel template labeled "AC216 Unit 1 Assignment 4 – Inventory Methods." The template incorporates various transaction scenarios, including inventory purchases, sales, returns, and depreciation expenses. The task involves accurately inputting data, performing calculations for ending inventory, cost of goods sold (COGS), and depreciation expense, while adhering to the specific inventory valuation method chosen or instructed in the scenario.

Using industry-standard accounting software or Excel's built-in functions, students must apply formulas to automate calculations, increasing efficiency and reducing errors. For inventory accounting, this involves tracking inventory layers, applying the appropriate cost flow assumptions, and updating inventory balances after each transaction. For depreciation, relevant methods such as straight-line or declining balance should be employed, considering asset purchase dates, salvage values, and useful life estimates.

The assignment emphasizes understanding the impact of these methods on financial statements. For example, LIFO generally results in higher COGS and lower taxable income during periods of rising prices, whereas FIFO produces higher ending inventory values and net income. Depreciation methods affect asset book values, net income, and tax obligations, which are critical for financial analysis and decision-making.

Students are required to complete the template by following detailed instructions within the spreadsheet, ensuring all calculations are properly documented. Once completed, the Excel file must be renamed to include the student's last name (e.g., "AC216 Unit 1 Assignment 4 – Inventory Methods Smith") and submitted as instructed. The process should take approximately two hours, allowing thorough review and verification of entries.

This exercise aims not only to reinforce technical skills in inventory and depreciation accounting but also to develop analytical thinking about how different methods influence financial reports. Through careful completion of the template, students will understand the significance of accurate journal entries, proper method selection, and the overall impact on business financial health.

References

  • Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial Accounting (16th ed.). McGraw-Hill Education.
  • Heising, N. (2020). Financial Accounting: Theory and Practice. Sage Publications.
  • Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting (11th ed.). Wiley.
  • AccountingTools. (2023). Inventory Valuation Methods. https://www.accountingtools.com
  • Investopedia. (2023). Depreciation Methods. https://www.investopedia.com
  • International Financial Reporting Standards (IFRS). (2019). IAS 2 - Inventories. https://www.ifrs.org
  • US Generally Accepted Accounting Principles (GAAP). (2022). FASB ASC 330. Inventory. https://asc.fasb.org
  • Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial Accounting Theory and Analysis. Wiley.
  • Journal of Accountancy. (2022). Impact of Inventory Methods on Financial Statements. AICPA.
  • Business Accounting Software. (2023). Best Practices in Inventory and Depreciation Accounting. https://www.benefits.com

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