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Inventory is generally carried on the balance sheet at its historical cost to the firm. This represents the most accurate value since it was an amount actually paid by the firm, not an estimate. If the market value changes upwards, the balance sheet value is not changed since accounting principles generally favor the more conservative (lower) value. If however the market value of inventory decreases (through obsolescence for example), then the inventory value is adjusted downward to accurately reflect this and ensure the value is not materially overstated on the firm's balance sheet. The retail price is never used for inventory valuation. The retail price will be used only for the income statement. So, using your example, the amount included in inventory would be 60.
Intermediary goods are not considered final goods. Only final goods can be included. Lets look at an example: Lets say A.B Star makes paper, which Halmart Cards uses to make greeting cards, the paper is called an intermediary good, and the card is called a final good. GDP only includes the value of the final good. the reason is that the value of intermediary goods is already included in the price of the final good. Thus, if the intermediary good was included than the measure would be doubled. But their is an exception. Intermediary goods can be included in the GDP only if they are put away as inventory for a while. Looking back at the greeting card example, if A.B Star put some of his paper away because he had a surplus of paper that paper would be included in the GDP until it was sent to Halmart Cards to be turned into a final good. Cheers!
Yes, it is included as goverment consumption.
total income and total expenditure are included when calculating GDP.
yes
Closing merchandise inventory belongs on both the income statement and the balance sheet. On the income statement, it is included under Cost of Goods Sold; on the balance sheet it is categorised under Current Assets.
Typically no. These costs are usually considered current period expenses and not added to inventory. However, there are certain situations where marketing costs might be deferred over a period of time, creating a prepaid expense.
suppose
Yes, it is included in inventory, which is included in assets.
no.
no....i think the change in inventory is included but not accumulation..
The factor that determines whether or not goods should be included in a physical count of inventory is physical possession or ownership of the goods. Only goods that are owned by the company and physically present in its possession should be included in the physical count. Goods that are on consignment or held on behalf of others should not be included in the count.
you can't actually buy a phone as they come included! you find them in your sim's inventory(:
Inventory is capitalized on the balance sheet as a current asset. Inventory is increaseed by items purchased (direct materials or finished goods), costs incurred in creating a product (for manufacturers), and an allocation of overhead to the creation of the product. As inventory is sold, the cost of the inventory sold is recorded by reducing inventory (a credit) and increasing Costs of goods sold (a debit).
In a recent 'Bike' magazine it was stated he earns £21M a year with all the merchandise included.
[Debit] Purchases [Credit] Cash / bank / accounts payable
ASC 330, Inventory, states shipping costs (read: freight out) do not contribute to bringing inventories to their present condition and location and as such should not be included in inventory costs. Because freight out is not considered a product cost, not only would you not capitalize freight out into inventory on the balance sheet, but you would also not record this cost as a COGS item, but rather a sales expense (SG&A). On the other hand, freight in is a purchase cost as it gets inventory to its current location (ie your warehouse), so that cost should be capitalized as inventory on your balance sheet which will later be recognized as a COGS item when you sell the related inventory.