Case One

Case 1. Assume you be opening a amaze 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 ar preparing the statements and essential knead some decisions about how to do the ac reckoninging for the business. wait on the spare-time activity questions (refer back to Chapter 5 if necessary): 1. Which type of memorandum administration get out you use? Give your reason. I escape use the constant descent system because it wields a outpouring record of inventory and cost of goods sold and achieves control everywhere inventory. 2. Show how to write in code crystallize purchases and dinero sales. How depart you treat the cost of transportation-in? sales Revenue ? gross sales Returns and Allowances ?Sales Discounts = Net Sales Revenue memorandum bargain for Returns and Allowances Purchase Discounts + Freight in = Inventory (Net address of Inventory) Since I will stand freight in, the cost of transportation-in will be added to the purchases of inventory. 3. How often do you plan to do a fleshly count of inventory on muckle? What will the natural 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 make based on count. 4. Inventory costs are rising. Which inventory costing method will you use in sound out 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 results in the highest cost of goods sold and the lowest coarse profit. That lets companies pay the lowest income appraisees when inventory costs are rising. minuscule tax payments conserve cash and thats the main reach of LIFO.If you call fo r to get a full essay, order it on our websi! te: OrderCustomPaper.com

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