Inventory Valuation   Term Paper ID:36169 Click to get this paper

Essay Subject: Reviews inventory valuation methods at Ford Motor Company... More...

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Paper Abstract: Reviews inventory valuation methods at Ford Motor Company. Also identifies assessment of selection and motivations and outcomes. Discusses the two major components of Ford's inventory policy. Paper Introduction: identified inventory inventory valuation methods and assessment ofselection motivations and outcomes ford motor company The Ford Motor Company\'s inventory policy includes two majorconsiderations The first consideration is inventory cost basis while thesecond consideration is inventory composition for valuation With respect to the cost basis for inventory the major policy choicesare a historical cost value the inventory at initial acquisition cost b replacement cost value inventory at the current market price or c some combination of historical and replacement cost Fischer Taylor Cheng Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. (2 5). Annual report 2 4. The policyapplies to all inventory classes (Ford Motor Company, 2 5). Practical advice on current issues. H. J., & Cheng, R. With respect to the cost basis for inventory, the major policy choicesare (a) historical cost (value the inventory at initial acquisition cost),(b) replacement cost (value inventory at the current market price), or (c)some combination of historical and replacement cost (Fischer, Taylor, &Cheng, 2 1). (8th ed.). H. Tax Adviser, 36(2), 66-81. Advanced accounting. P., & Lowensohn, S. Forthe remainder of the raw material groups, work-in progress, and finishedproducts, the Company's policy is to determine inventory composition basedon the FIFO inventory valuation method. A., Anthony, J. identified inventory, inventory valuation methods, and assessment ofselection motivations and outcomes: ford motor company The Ford Motor Company's inventory policy includes two majorconsiderations. Cincinnati, Ohio: South-western College Publishing.Ford Motor Company. The FIFO inventory valuationmethod is applied to approximately 75 percent of the Company's inventories,with the LIFO inventory valuation method applied to the remaining 25percent of the Company's inventories (Ford Motor Company, 2 5). With respect to inventory composition for valuation, themajor policy choices are as follows (Beams, Anthony, Clement, & Lowensohn,2 2): o FIFO (first in-first out) o LIFE (last-in-first out) o Weighted average cost (a weighted average of the cost of all items in beginning inventory and all added to the inventory to date) o Some combination of the FIFO, LIFO, and weighted-average methods Ford Motor Company accounts for their inventories in four classes.The inventory classes are as follows (Ford Motor Company, 2 5): o Raw materials o Work-in-progress o Supplies o Finished products With respect to the cost basis for inventory, Ford Motor Company'spolicy is to state values at the lower of cost or market. With respect to inventory composition for valuation, Ford MotorCompany's policy is to determine inventory composition for supplies andsome raw material groups based on the LIFO inventory valuation method. The first consideration is inventory cost basis, while thesecond consideration is inventory composition for valuation. Advanced accounting. The application of the LIFO method toapproximately 25 percent of the Company's total inventories creates areduction of approximately 8.5 percent of the total inventory value underthe FIFO method (Ford Motor Company, 2 5). M., Taylor, W. (2 5, February). H., Clement, R. Inflation in thegeneral economy has been under control for some years. ReferencesBeams, F. Thus, there are fewmotivations for the Company to adopt the LIFO method as a general policy.Ford Motor Company, however, does apply the LIFO method to a few rawmaterial groups and to supplies. (2 1). The reduction in inventoryvalue increases the reported costs of good used in production, therebylowering gross profit, and (other things remaining equal) the Company'seventual income tax liability. Upper Saddle River, new jersey: Prentice-Hall, Inc.Fischer, P. During periods of rapidly rising prices or for products for whichprices are rising, the LIFO inventory valuation method provides income taxbenefits to companies (Gottschalk & Schwarz, 2 5). Dearborn, Michigan: Ford Motor Company.Gottschalk, S., & Schwarz, M. (2 2). If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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