Graded Discussion Board (GDB) FINANCIAL ACCOUNTING (MGT101)

REQUEST TO ALL RELATED FILED PERSON PLEASE PARTICIPATE. (POST ANSWER) 

Topic to be tested:

·  Stock/Inventory Valuation

Learning Objectives:

·  To develop an understanding about true and fair reporting of stock based on available and recommended methods of valuation and their impact on financial statements.

CASE:

Mr. A was a junior accountant of Fine Company Limited (FCL) which is involved in the manufacturing and marketing of homogeneous products with the brand name of Dry Milk while facing the period of inflation. He had left his job due to his domestic issues and Mr. B has been hired as his replacement. While reviewing the company’s accounting records, Mr. B has come to know that there has been no consistent stock valuation policy in the past for valuing the company’s stocks. This had lead towards an inappropriate impact on the financial reporting in terms of inconsistent profitability and financial position. 

He has discussed the matter with the chief accountant – Mr. C who told him that the company is in the process of implementation program of related IASs on various accounting issues. As there has been no application of IAS’s in the company, therefore, the inventory has been treated on many valuation techniques including LIFO, FIFO, weighted average, and some others keeping in view the convenience to the accountant.

Mr. B suggested applying an appropriate valuation policy so as to produce consistency in the financial reporting. He emphasized that it will let the company to present fair reporting of the company’s operation and performance in the coming financial statements. He argued that this will also match the inventory costs as per the current market prices, and the inventory will reflect fairly current market prices in the company’s balance sheet. After going through this meeting, Mr. B has been asked to prepare a preliminary report on the inventory valuation of the present stock held with the company while using the appropriate stock valuation method.

Discussion Questions:

1.   What was the stock valuation method used by Mr. A in past that cased a lower profitability and huge difference of market price of stock with its reported cost in balance sheet? (Just write the name of asked method)

2.   Recommend Mr. B the most appropriate stock valuation method to use in his preliminary report for inventory valuation? (Just write the name of recommended method)                                           

3.   Upon what grounds did you recommend the method in question 2 above?

                                                                                                    

                                (Note: To avoid negative marking complete your comment within 100 words.)

Important Instructions:

1. Your discussion must be based on logical facts.

2. The GDB will remain open for 3 working days/ 72 hours.

3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.

4. Obnoxious or ignoble answer should be strictly avoided.

5. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

Three Basis Approaches to Valuing Inventory

There are three basis approaches to valuing inventory 

(a) First-in, First-out (FIFO): Under FIFO, the cost of goods sold is based upon the cost of material bought earliest in the period, while the cost of inventory is based upon the cost of material bought later in the year. This results in inventory being valued close to current replacement cost. During periods of inflation, the use of FIFO will result in the lowest estimate of cost of goods sold among the three approaches, and the highest net income.

(b) Last-in, First-out (LIFO): Under LIFO, the cost of goods sold is based upon the cost of material bought towards the end of the period, resulting in costs that closely approximate current costs. The inventory, however, is valued on the basis of the cost of materials bought earlier in the year. During periods of inflation, the use of LIFO will result in the highest estimate of cost of goods sold among the three approaches, and the lowest net income.

(c) Weighted Average: Under the weighted average approach, both inventory and the cost of goods sold are based upon the average cost of all units bought during the period. When inventory turns over rapidly this approach will more closely resemble FIFO than LIFO.

CS101 Assignment No.03 Fall 2013-2014 How to Insert an Excel worksheet or chart in a PowerPoint presentation

• In Excel select the range of data you want to link to PowerPoint.

• From the Excel Edit menu, choose Copy

• Switch to the PowerPoint datasheet and double-click on the graph to open the datasheet.

• Select Edit menu > Paste Link.

CS101 Assignment No.03 Fall 2013-2014 How to Insert an Excel worksheet or chart in a PowerPoint presentation

CS101 Assignment No.03 FALL 2013

How to Insert an Excel worksheet or chart in a PowerPoint presentation

Go to the Excel spreadsheet which has your data. 

Select the data you would like to chart, create a simple chart in your Excel sheet. 

Then copy the chart and paste it into your PowerPoint slide. 

You can now format the chart with all of PPT’s charting tools, and if you go to the Design Contextual Tab and select Edit Data, it will bring up your Excel spreadsheet. 

You can delete the chart you created in Excel, which will have no effect upon the PowerPoint Chart. The chart will be automatically linked to the Excel data. 

This may not be an elegant solution, but it is simple and it works. There is no command to indicate in PowerPoint which existing Excel spreadsheet you would like to use for your graph.

 In PowerPoint 2003, to use your Excel spreadsheet data to create a PowerPoint chart, you can:

• Copy your spreadsheet data into the datasheet PPT provides when you go into charting.
• Go into charting in PPT and use the Import File button on the chart toolbar to insert your Excel spreadsheet (you need to know the range of cells to import).
• Insert Object, From a File, in your PPT slide and browse to select your Excel file – indicate whether you wish to have it linked or not, and them Import the Excel data.