ACC 290 Week 4


Acc 290 Week 4


Week 4 DQ1

How would you calculate cost of goods sold? What items make up cost of goods sold?  How does beginning and ending inventory affect cost of goods sold?


Week 4 DQ2

What are the journal entries a merchandising organization would use to record the purchase and subsequent sale of merchandise? How would these transactions differ with a periodic versus a perpetual inventory system?


Week 4 DQ3

Why do generally accepted accounting principles require the use of lower of cost or market in valuing inventory?  What are the three different inventory cost flow assumptions commonly used in commerce today and allowed by generally accepted accounting principles? How does a company determine what cost flow assumption they should use?


ACC 290 Week 4 Individual Assignment Week Four Problem 



ACC 290 Week 4 Learning Team Assignment Financial Reporting Problem, Part 1


ACC 290 Week 4 Learning Team Reflection Summary


ACC 290 Week 4 Summary


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Acc 290 Week 4,

1-One can determine the cost of goods sold when using a periodic inventory system does not calculate the cost of goods sold until the end of the period. At the end of the period a count is done to determine the ending balance of the inventory. After this is completed the cost of goods sold




The perpetual system of inventory keeps a running tally of inventory that is live and this is done by automatically making changes to the inventory as each item is sold, freight cost, returned, or



The reason behind understanding value of inventory at a point in time is to accurately report what the value of the inventory (asset) is for a company.   If the asset of a company is worth less than what the market is willing to pay for it than the company will not make money on selling those goods.  Also, knowing the price the inventory was purchased at compared to what the market price


Week 4 Problems


Date Accounts Debit Credit
         July                        1 Cash  12,000 12,000
                        1 Equipment  8,000 6,000


                        3 Supplies    900 900
                        5 Prepaid Insur.  1,800 1,800
                        12 Accounts Rec.  3,700 3,700
                        18 Accounts Pay.  1,500 1,500
                        20 Salary Exp.  2,000 2,000
                        21 Cash  1,600 1,600
                        25 Accounts Rec.  2,500 2,500


Financial Reporting Problem, Part I

The company’s annual report is important because it gives the shareholders a clear picture and understanding about how the company is doing financially.  The annual reports provide thorough information on very significant section of the accounts, such as the balance sheet, the income statement, and the cash flow statement.  The information presented in the annual report would also be essential to potential investor, employee, and any other people that may have interest in financial aspect of the business.

The company’s total assets at the end of 2009 were $39,848,000 (PepsiCo, n.d.).  However, in 2010 its most recent annual report shows an increase to the previous annual reporting period of $28,305,000 that brings PepsiCo’s total assets to $68,153,000 (PepsiCo, n.d.).  This information is important because it demonstrate what the company owns.


Week Three Reflection Summary

Week three was very informative.  The team members’ knowledge has continued to increase in accounting.  The team members learned about preparing closing entries, reversing entries, and a post-closing trial balance.  In addition, the team members gain knowledge


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