Question

8) walter co. and sandburg industries report the following information at december 31: walter sandburg accounts receivable $41,000 $68,000 cash 6,000 7,000 finished goods inventory 25,000 work in process inventory 40,000 merchandise inventory 48,000 prepaid expenses 1,000 2,000 raw materials inventory 21,000 required: (a) which company is a manufacturer? explain. (b) prepare the current assets section of the balance sheet for the manufacturer.

Answer 1

Walter Co. is a manufacturer because it uses raw materials, and has a stock of merchandise inventory, work-in-progress inventory, and finished goods inventory. The current assets of Walter Co. will be:

Current Assets:

Cash                                                          6,000

Inventories

Raw materials inventory       21,000

Work in progress inventory  40,000

Finished goods inventory      25,000

Merchandise inventory           48,000

Total inventory                                      1,34,000

Other assets

Accounts receivable                               41,000

Prepaid expenses                                     1,000

Current assets                                                               2,22,000

A manufacturing company is a company that takes in raw materials processes the raw materials and then sells the finished goods manufactured in the market. So the current assets section of the balance sheet of Walter Co. is given which will be written on the right side of the balance sheet.

Learn more about manufacturing companies here:

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