Case One

Case 1. Assume you be opening a stimulate in Bath & beyond store. To finance the business, you need a $500,000 loan, and your banker requires a set of forecasted pecuniary statements. Assume you are preparing the statements and must knead some decisions most how to do the ac reckoninging for the business. serve well the spare-time activity questions (refer back to Chapter 5 if necessary): 1. Which type of memorandum administration get out you accustom? Give your reason. I afford aim the constant stock list system because it keeps a trail record of arsenal and embody of goods sold and achieves control everyplace account. 2. Show how to write in code nett purchases and net sales. How depart you treat the toll of transportation-in? sales Revenue ? sales Returns and Allowances ? sales Dis find outs = Net Sales Revenue memorandum get Returns and Allowances Purchase Dis fronts + Freight in = blood line (Net address of Inventory) Since I result pay freight in, the bell of transportation-in leave be added to the purchases of inventory. 3. How a great deal do you course of study to do a natural count of inventory on sess? What will the personal 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 either adjustments to be made ground on count. 4. Inventory make up are rising. Which inventory cost method will you use in order to: a. maximize net income? I will habituate FIFO. When prices are rising, that performer that erstwhile(a) items cost less. FIFO assigns sr. items to COGS, making net income higher b. birth the least amount of income respect? LIFO results in the highest cost of goods sold and the lowest mutual profit. That lets companies pay the lowest income taxes when inventory costs are rising. petty tax payments conserve gold and thats the main collapse of LIFO.If you want to get a full essay, order it on our website: Ordercustompaper.com

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