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Semenov [28]
3 years ago
10

Because Mei-ling has had such a successful first few months, she is considering other opportunities to develop her business. One

opportunity is the sale of fine European mixers. The owner of Generous Supply Co. has approached Mei-ling to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately RM575, and Mei-ling would sell each one for RM1,150. Mei-ling comes to you for advice on how to account for these mixers.
Mei-ling asks you the following questions.
1. "Would you consider these mixers to be inventory or should they be classified as supplies or equipment?" Why?
2. "I’ve learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?"
3. "How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?"
Business
1 answer:
rosijanka [135]3 years ago
7 0

Answer:

1. "Would you consider these mixers to be inventory or should they be classified as supplies or equipment?" Why?

The mixers will be part of merchandise inventory since Mei-ling is purchasing them and will later resell them at a higher price and hopefully make a profit. Products classified as supplies or equipment are used by the company in their day to day activities and are not meant for resale.

2. "I’ve learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?"

The perpetual inventory system is much better than the periodic inventory system, but it is also more expensive to use. Depending on the number of mixers that are going to be sold, you can do it hand or use a computer software which would make things much easier, but you need to spend time (labor) and money to do so.

If Mei-ling is expecting to sell only a small number of mixers, then she could use a periodic inventory system which is much more simple and is only updated every certain period of time (monthly, quarterly, semiannually or annually). This is a cheaper system but it is the best alternative.

3. "How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?"

Even if you use the perpetual inventory system, you will eventually need to physically count your inventory in order to make sure that the records have been properly made, but you could do it once or twice a year. Again it depends on the total units that she expects to have in inventory.

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5 0
2 years ago
Net sales$688,500 $450,000 Cost of goods sold 337,364 133,200 Determine the 2016 and 2017 trend percents for net sales using 201
alisha [4.7K]

Answer:

Trend- % change in sales =  34.64%

Explanation:

<em>Trend analysis entails determining the performance of a business over time by comparing its performance data from one period to another. The aim of trend analysis is to identify the behavior of a set of ratios over a period of time by comparing them across different years.</em>

To determine the trend for a particular data, we use the formula below

% Change in variable =

(Current year figure - Previous year figure)/Previous year figure × 100

DATA

Current year figure  for sales (2017) - 450,000

Previous year figure for sale (2016) - 688,500

% change in sales =   (450,000 -688,500)/688,500 × 100 = 34.64%

% change in sales =  34.64%

This implies that the company made sales in 2017 which is 34.64% less than that made in 2016

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2 years ago
A pharmacy has determined that a healthy person should receive 70 units of proteins, 100 units of carbohydrates and 20 units of
makvit [3.9K]

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3 0
2 years ago
The reason why reinvested earnings have a cost equal to the required rate of return is because investors expect to earn on those
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2 years ago
On January 1, Skills Company purchased as a short-term investment a $1,000, 6% bondfor $1,000. The bond pays interest on January
Arturiano [62]

Answer:

Option (B) is correct.

Explanation:

Interest accrued for 6 months (January 1 to July 1):

= $1,000 × 6% × (6 ÷ 12)

= $30

This shall be credited to interest revenue as this is the income of the investor.

Sale value of investment:

= Bond selling price on July 1 + Interest accrued for 6 months

= $1,200 + $30

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Gain on sale of investment:

= (Selling price - Purchase price) - Accrued interest

= ($1,230 - $1,000) - $30

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Cash A/c                 Dr. $1,230

To debt investments                  $1,000

To Gain on sale of investment  $200

To Interest revenue                   $30

(To record the cash proceeds at the time the bond is sold)

7 0
3 years ago
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