Class visitation

Name: Ricardo Buayan
Class: CS4
Instructor: Anthony
Date & Time: 09/16/2008, 6:00 - 8:00 P.M.
Professor: Thaddeus J. Shalek, CPA, CVA, MBA

Class Visitation Report

The topic was about Periodic and Perpetual inventories.
The professor discussed and differentiate the two method
of accounting procedure in recording inventory. Under
Periodic inventory system, it keep the inventory balance
at the same value that it was at the beginning of the year.
At year end, the inventory balance is adjusted to a physical
count. To account for inventory, purchases in periodic
system, and account called "purchases" is used in recording
rather than by debititng "inventory". While under
Perpetual inventory system, record cost of goods sold and
keep inventory at its current balance throughout the year.
Therefore, there is no need to do a year-end inventory
adjustment unless the perpetual records disagree or not
in balance with the inventory count. In addition a
seperate cost of goods sold calculation is unnecessary
since cost of goods sold is recorded whenever inventory
is sold.

Example :
unit cost is held constant to avoid the necessity of using
a cost of flow assumption.

Beginning inventory 100 units @$5.00 = $ 500.00
purchases 900 units @$5.00 = 4,500.00

Goods available for sale 1,000 units @$5.00 $5,000.00
Sales 600 units @10.00 = 6,000.00

Ending Inventory 400 units @$5.00 = $2,000.00

Example of Perpetual Inventory:

Beginning inventory 100 units @$5.00 = $ 500.00
Purchases 900 units @$5.00 = 4,500.00
------------ -----------
Available for sale 1,000 units @$5.00 = $5,000.00
Cost of sales 600 units @$5.00 = 3,000.00
------------ -----------
Ending Inventory 400 units@$5.00 = $2,000.00

Example of Periodic Inventory:

Beginning Inventory 100 units @$5.00 = $ 500.00
Purchases 900 units @$5.00 = 4,500.00
----------- -----------
Available for sale 1,000 units @$5.00 = $ 5,000.00
Ending Inventory 400 units @$5.00 = 2,000.00
----------- -----------
Cost of Sales 600 units @$5.00 = $ 3,000.00

The method of teaching I think is the same with that in my
country. The only difference is that, classroom has the
projector and computer that can be use during the class
session. Back home teachers do all the writing in the
black board.