Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 311 views

    Farm Inventory

    Uploaded by

    tstcfocalperson
    A farm inventory is a list of all assets owned and liabilities owed by a farm with their corresponding values. It should be prepared at the start and end of each accounting period. Assets are valued using cost, market price, or depreciation methods. Common inventory costing methods include FIFO, LIFO, and average costing, which are used to determine the value of materials used and unused. The example shows Bounty Farm's inventory on January 1, 2018, which lists current assets like cash and accounts receivable, fixed assets like land and buildings, equipment, and current and long-term liabilities.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Farm Inventory

    Uploaded by

    tstcfocalperson
    311 views9 pages
    A farm inventory is a list of all assets owned and liabilities owed by a farm with their corresponding values. It should be prepared at the start and end of each accounting period. Assets are valued using cost, market price, or depreciation methods. Common inventory costing methods include FIFO, LIFO, and average costing, which are used to determine the value of materials used and unused. The example shows Bounty Farm's inventory on January 1, 2018, which lists current assets like cash and accounts receivable, fixed assets like land and buildings, equipment, and current and long-term liabilities.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A farm inventory is a list of all assets owned and liabilities owed by a farm with their corresponding values. It should be prepared at the start and end of each accounting period. Assets are valued using cost, market price, or depreciation methods. Common inventory costing methods include FIFO, LIFO, and average costing, which are used to determine the value of materials used and unused. The example shows Bounty Farm's inventory on January 1, 2018, which lists current assets like cash and accounts receivable, fixed assets like land and buildings, equipment, and current and long-term liabilities.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    311 views9 pages

    Farm Inventory

    Uploaded by

    tstcfocalperson
    A farm inventory is a list of all assets owned and liabilities owed by a farm with their corresponding values. It should be prepared at the start and end of each accounting period. Assets are valued using cost, market price, or depreciation methods. Common inventory costing methods include FIFO, LIFO, and average costing, which are used to determine the value of materials used and unused. The example shows Bounty Farm's inventory on January 1, 2018, which lists current assets like cash and accounts receivable, fixed assets like land and buildings, equipment, and current and long-term liabilities.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Farm Inventory

    Farm Inventory
    Definition of farm inventory
    - a complete list of what a farm owns and
    owes with their corresponding values at
    a given date

    How to prepare a farm inventory


    • Actual physical count
    • Based on existing records
    • Both
    Farm Inventory
    When to prepare a farm inventory
     At the start of the accounting period
     At the end of the accounting period
     as desired and need of business

    Methods of valuation
    1. Valuation at cost
    2. Based on present/prevailing market
    prices
    3. FIFO, LIFO, AC
    4. Cost minus depreciation
    FIFO (First In, First Out)
    Purchases:
    1st - 10 bags @ P300/bag = P3,000
    2nd – 20 bags @ P 400/bag = 8,000
    3rd – 10 bags @ P 500/bag = 5,000
    Total = P16,000
    Unused bags = 15
    3rd - 10 bags @ 500/bag = P 5,000
    2nd - 5 bags @ 400/bag = 2,000
    Total = P 7,000
    How many bags were used and how much is the
    total value?
    LIFO (Last In First Out)
    Purchases:
    1st - 10 bags @ P300/bag = P3,000
    2nd – 20 bags @ P 400/bag = 8,000
    3rd – 10 bags @ P 500/bag = 5,000
    Total = P16,000
    Unused bags = 15
    1st purchase - 10bags @ 300/bag = P 3,000
    2nd purchase - 5 bags @ 400/bag = 2,000
    Total = P 5,000
    How many bags were used and how much is the total
    value?
    Average Costing (AC)
    Purchases:
    1st - 10 bags @ P300/bag = P3,000
    2nd – 20 bags @ P 400/bag = 8,000
    3rd – 10 bags @ P 500/bag = 5,000
    Total - 40 bags = P16,000
    Average cost = Total cost/total number of bags
    = P16,000/40 bags = P400/bag

    Unused bags = 15 bags x P400/bag = P6,000


    How many bags were used and how much is the total value?
    Problem
    Given:
    Purchases:
    1 - 20 bags @ P400
    2 – 30 bags @ P 350
    3 – 10 bags @ P 300
    Unused bags = 25
    a. Determine the value of unused materials
    using FIFO, LIFO and AC
    b. Determine the value of used materials using
    FIFO, LIFO and AC
    Illustration of Farm Inventory

    On January 1, 2018, the owner of Bounty Farm decided to


    start keeping a systematic record of his farm transactions
    to aid him in making wise management decisions. The
    assets of the farm include land with a cost of P800,000;
    poultry house, P1,000,000; and cash, P50,000. The poultry
    stock inventory (PSI) consisted of 600 heads broilers
    valued at P100/head. His equipment are incubator,
    wheelbarrow and weighing scale costing, P24,000, P2,000
    and P8,000, respectively. His records show receivable of
    P110,000 from various customers. The farm’s liabilities
    include an accounts payable to poultry Store amounting to
    P40,000 and a bank loan of P400, 000.
    Illustration of Farm Inventory
    Bounty Farm
    Farm Inventory
    January 1, 2018
    Assets Liabilities
    Current Current
    Cash 50,000 A/P 40,000
    A/R 110,000
    PSI 60,000 Fixed
    Fixed B/L 400,000
    Land 800,000 Total Liabilities 440,000
    Building 1,000,000
    Equipment Green Farm Capital - 1,614,000
    Incubator 24,000
    Wheel barrow 2,000
    Weighing scale 8,000
    Total Assets--------------------- 2,054,000 Total Liabilities and Capital 2,054,000

    You might also like