This problem-based learning activity helps students apply inventory cost flow methods under a periodic inventory system. Students determine the value of the ending inventory and cost of goods. The four methods included are specific identification, weighted average cost, first-in first-out (FIFO), and last-in first-out (LIFO). In addition, they compare and contrast how applying the different costing methods affects the balance sheet and income statement. Students are given data to use in their computations. Following the computations, students compare amounts to financial statements.
Type of Material:
Assignment
Recommended Uses:
In class, homework, individual, team
Technical Requirements:
Google Chrome, Microsoft Edge, Excel
Identify Major Learning Goals:
Compare the cost of goods sold and ending inventory cost using the specific identification, weighted average cost, first-in first-out (FIFO), and last-in first-out (LIFO) inventory costing methods.
Compare and contrast the affect of using different inventory costing methods on the income statement and balance sheet.
Target Student Population:
1st year accounting/business college students
Prerequisite Knowledge or Skills:
Fundamental accounting equation, Accounting cycle, Inventory concepts
Content Quality
Rating:
Strengths:
This assignment involves a spreadsheet that students complete to compute the value of inventory using different inventory computation methods.
The spreadsheet is easy for students to follow and demonstrates the concept of periodic inventory very well.
This worksheet helps students enrolled in introductory financial accounting practice applying inventory costing concepts.
The instructor will be able to print and circulate learning material to students, acting as a coach, confirming correct responses, and providing hints for incorrect responses.
Alternatively, the worksheet file could be made available to students electronically, allowing them to complete learning using spreadsheet software.
Students build self-confidence by grasping the concepts learned.
This is achieved when students receive immediate feedback during practice.
Concerns:
None
Potential Effectiveness as a Teaching Tool
Rating:
Strengths:
This is a very effective tool to use with students to clarify inventory valuation.
It could be used as a formative evaluation to determine students’ understanding of periodic inventory concepts.
The assignment is self-contained with data for students to apply.
After completing the learning material, students will reinforce their inventory costing skills using four methods: specific identification, weighted average cost, first-in first-out (FIFO) and last-in first-out (LIFO).
Different methods are compared and contrasted which aids in building relationships and reinforcing learning.
The learning activity does not require a lot of time, learning from using this material is very effective.
Concerns:
None
Ease of Use for Both Students and Faculty
Rating:
Strengths:
This assignment is very accessible and easy to use.
Instructions are clear and the instructor answer key is included.
The material is accessible.
As a standalone Excel worksheet, the internet is not necessary for assignment completion.
The material can be printed and used in paper and pen format.
Alternatively, spreadsheet software such as MS Excel, Google sheets (Internet), or another spreadsheet program can be used.
Very easy to use in paper format.
Concerns:
None
Creative Commons:
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