Case One

Case 1. Assume you be opening a hale in Bath & Beyond store. To finance the business, you need a $500,000 loan, and your banker requires a set of forecasted financial statements. Assume you be preparing the statements and moldiness knead some decisions about how to do the ac reckoninging for the business. declaration the spare-time activity questions (refer back to Chapter 5 if necessary): 1. Which type of memorandum form get out you use? Give your reason. I perish use the constant broth system because it cargo decks a rail record of inventory and cost of goods sold and achieves control everyplace inventory. 2. Show how to write in code crystallize purchases and net sales. How depart you treat the cost of transportation-in? sales Revenue ?gross revenue Returns and Allowances ?Sales Discounts = Net Sales Revenue memorandum barter for Returns and Allowances Purchase Discounts + Freight in = Inventory (Net address of Inventory) Since I will concede freight in, the cost of transportation-in will be added to the purchases of inventory. 3. How often do you plan to do a carnal count of inventory on muckle? What will the physiologic count accomplish? I plan to do a physical count of inventory on hand at least once a year.

The physical count should keep inventory current and allow any adjustments to be do based on count. 4. Inventory costs are rising. Which inventory costing method will you use in clubhouse to: a. Maximize net income? I will habituate FIFO. When prices are rising, that means that erstwhile(a) items cost less. FIFO assigns older items to COGS, making net income higher b. Pay the least amount of income assess? last in first out res! ults in the highest cost of goods sold and the lowest coarse profit. That lets companies pay the lowest income valuatees when inventory costs are rising. minuscule tax payments conserve cash and thats the main reach of LIFO.If you desire to get a full essay, order it on our website: OrderEssay.net

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