Your Ask Joey ™ Answer

What is an inventory rollforward?

An inventory rollforward is prepared to understand the movements in the balance sheet and income statement. The inventory rollforward helps us understand beginning and ending inventory, purchases of materials throughout the year, as well as cost of goods sold.

The visual below illustrates how an inventory rollforward is prepared. An inventory rollforward can be used to solve for any of the variables as long as you have the information for the rest of the components.


Back To All Questions

You might also be interested in...

  • CECL Excel Workbook

    If you would like to use the Excel workbook that was used to create the Universal CPA lecture on CECL for debt securities, please click the link below to download the Excel workbook: CECL Calculation workbook (Universal CPA Review)

  • Journal Entry for Direct Materials Variance

    Journal Entry for Direct Materials Variance In the current year, Mission Burrito budgeted 6,000 pounds of production and actually used 4,000 pounds. Material cost was budgeted for $5 per pound and the actual cost was $8 per pound. What would the debit or credit to the direct material efficiency variance account be for the current...

  • Understanding Variance Analysis

    Variance Analysis Variance analysis is a method for companies to compare its actual performance vs its budgeted amount for that cost measurement (related to the flexible budget). The differences between the standard (budgeted) amount of cost and the actual amount that the organization incurs is referred to as a variance. By analyzing variances, the company...