INVENTORY MANAGEMENT

Technology and Livelihood Education 10
(Bookkeeping)
3rd Quarter_Week 6

REVIEW (SPECIAL JOURNALS)

Multiple Choice

Sold cash merchandise amounting to Php 34, 500 to various customers

• SALES JOURNAL

• CASH RECEIPT JOURNAL

• PURCHASE JOURNAL

• CASH PAYMENT JOURNAL

Multiple Choice

Payment in advance for office space rental.

• SALES JOURNAL

• CASH RECEIPT JOURNAL

• PURCHASE JOURNAL

• CASH PAYMENT JOURNAL

Multiple Choice

Additional cash investments of the owner

• SALES JOURNAL

• CASH RECEIPT JOURNAL

• PURCHASE JOURNAL

• CASH PAYMENT JOURNAL

Multiple Choice

Office supplies acquired on credit

• SALES JOURNAL

• CASH RECEIPT JOURNAL

• PURCHASE JOURNAL

• CAH PAYMENT JOURNAL

Multiple Choice

Merchandise sold to various customers with terms 2/10, n/20

• SALES JOURNAL

• CASH RECEIPT JOURNAL

• PURCHASE JOURNAL

• CASH PAYMENT JOURNAL

Why is it important to prepare the Special Journal in a merchandising business?

CASE ANALYSIS

Instruction: Analyze the given case of a business with the challenge/s it is facing. Provide a solution to be implemented.

Open Ended

Recommend one solution to address the problem faced by ABC Electronics

INVENTORY MANAGEMENT

At the end of this lesson, students are able to:

1. identify what is Inventory and Inventory Management

2. differentiate the systems of inventory

3. conduct physical count of inventory

4. solve for the ending inventory

WHAT IS AN INVENTORY?

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An Inventory...

Include goods purchased for the purpose of resale or those to be processed which will later be sold in the usual course of the business.

WHAT IS INVENTORY MANAGEMENT?

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Inventory Management is...

• the process of overseeing and controlling the flow of goods or materials within a business.

• involves the management of inventory levels, ordering and replenishment, storage, and tracking of inventory items from procurement to consumption or sale.

Why is it necessary to undergo inventory management?

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TWO SYSTEM OF INVENTORY

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PERPETUAL SYSTEM

• This system of accounting for inventories is commonly used by trading business whose individual items of merchandise involve large peso amount.

• STOCK CARD

PERIODIC SYSTEM

• Mostly used by trading business that sells a number of varied merchandise with low unit cost.

PHYSICAL COUNT OF INVENTORY

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• ACTUAL COUNTING

• WEIGHING

• MEASURING

• DESCRIBING
  

METHODS OF INVENTORY MANAGEMENT (VALUATION)

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FIFO (FIRST IN- FIRST OUT)

• This method may be applied to both period and perpetual systems of accounting for inventories. The method denotes that goods purchased first will be sold first. 

• It follows that the oldest purchased are sold first and form part of the cost of the merchandise. The latest purchase may remain unsold and will become the ending inventory.

TRANSACTIONS: (YEAR: 2023)

Jan 1 Beginning inventory, 70 units at Php 100

Mar 15 Purchases 50 units at Php 105

Jun 30 Sold 60 units

Oct 15 Purchase 40 units at Php 110

Dec 31 Sold 50 units

DO THIS ON YOUR OWN
Prepare the stock card to determine the ending inventory, using FIFO METHOD:

2024

January

1         Beginning inventory of 100 units at ₱ 2, 000

5         Sold 50 units

10       Purchase additional 200 units at ₱ 25

15       Sold ₱ 1, 250

25       Purchased 100 units at ₱ 20

LIFO (LAST IN- FIRST OUT)

• This method denotes that the latest purchases are sold first.

• The latest or recent purchases will form part of cost or merchandise sold and the early purchases will remain unsold thus forming the ending inventory.

• LIFO applies to both periodic and perpetual systems of accounting for inventories.

TRANSACTIONS: (YEAR: 2023)

Jan 1 Beginning inventory, 70 units at Php 100

Mar 15 Purchases 50 units at Php 105

Jun 30 Sold 60 units

Oct 15 Purchase 40 units at Php 110

Dec 31 Sold 50 units

DO THIS ON YOUR OWN
Prepare the stock card to determine the ending inventory, using LIFO METHOD:

2024

January

1         Beginning inventory of 100 units at ₱ 2, 000

5         Sold 50 units

10       Purchase additional 200 units at ₱ 25

15       Sold ₱ 1, 250

25       Purchased 100 units at ₱ 20