Chapter 14: Inventory & Services Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2 of 14 Inventory & Services Merchandise inventory includes all goods owned by the business and held for sale. For tracking merchandise inventory, Cynthia’s Service Merchandise uses Account No , Merchandise Inventory. Peachtree uses a perpetual inventory system. In a perpetual inventory system, a merchandising business updates inventory each time an item is purchased or sold. Inventory calculations include FIFO (first in, first out), LIFO (last in, first out), and average cost methods. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

3 of 14 Peachtree Tips Peachtree Tips Chapters 12 and 13 must be completed before starting Chapter 14. In Chapters 12-15, Peachtree uses the average inventory method. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

4 of 14 Backups and Saved Files, p. 427 Backup (.ptb extension) Excel (.xlsx) and Adobe (.pdf) KBPageNos. Chapter 14 Begin.ptb 1,091 KB 559 Chapter 14.ptb 1,119 KB 572 Chapter 14_CL_VL_CGSJ_IAJ_IPR_GLTB.xlsx 32 KB Exercise 14-1.ptb 993 KB 575 Exercise 14-2_CRJ_PJ_CGSJ_IAJ_IPR_GLTB.xlsx 30 KB 576 Exercise 14-2_Cash Receipts Journal.pdf 7 KB 576 Exercise 14-2_Purchase Journal.pdf 6 KB 576 Exercise 14-2_Cost of Goods Sold Journal.pdf 6 KB 576 Exercise 14-2_Inventory Adjustment Journal.pdf 5 KB 576 Exercise 14-2_Inventory Profitability Report.pdf 6 KB 576 Exercise 14-2_General Ledger Trial Balance.pdf 6 KB 576 Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

5 of 14 Glossary of Terms Chapter 14 Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

6 of 14 Merchandise inventory, p. 549 Merchandise inventory includes all goods owned by the business and held for resale. The inventory account for Cynthia’s Service Merchandise is Account No , Merchandise Inventory. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

7 of 14 Merchandising business, p. 549 Retail stores that resell goods and/or perform services. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

8 of 14 FIFO, p. 549 The FIFO (first in, first out) inventory method assumes that the items in the beginning inventory are sold first. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

9 of 14 LIFO, p. 549 The LIFO (last in, first out) inventory method assumes that the goods received last are sold first. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Inventory Adjustment, p. 561 In Chapter 14, you enter an inventory adjustment for damaged merchandise. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved. 10 of 14

11 of14 Going to the Net, p. 573 Access the Small Business Knowledge Base website at Scroll down the window to Merchandise Inventories: Perpetual Inventory. Answer these questions about perpetual inventory What is a perpetual inventory at retail? 2. When is a physical count of inventory necessary? Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Analysis Question, p. 576 Which one of Cynthia’s Service Merchandise items shows the highest gross profit percentage? Why? 12 of 14 Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Assessment Rubric, p of 14 DateTransaction Navigation Center/Module Task Window Journal Dr./Cr. 1/30Two tool kits purchased from Carson Phillips Tools on 1/27 were damaged by the owner. 1/31Cash sales in the amount of $4,752, ($4,400 plus $352 sales taxes) were deposited at Caliber Bank: 20 tool kits, $1,700; 18 hardware sets, 2,700. Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Online Learning Center  Go online to for additional resources. Link to Student Edition, select Chapter o Interactive Testing o Glossary of Terms o Feature Quiz o Narrated PowerPoints o Assessment Rubric o Going to the Net o QA Templates Copyright ©2013 by The McGraw-Hill Companies, Inc. All rights reserved.14 of 14