Answer:
"Zero point zero zero zero three five four"
Explanation:
When you say the numbers after the decimal, you read each digit separately.
This is opposed to the number before the decimal, where you read the numbers together. (For example, 45.56 is forty-five point five six).
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.
Answer:
inventory 50,000 debit
accounts payable 50,000 credit
--to record purchase of goods--
accounts payable 50,000 debit
notes payables 50,000 credit
--to record teh issued promissory note to setle the account--
cash 50,000 debit
discount on note payable 4,000 debit
notes payable 54,000 credit
--to record the discounted note--
Explanation:
a) we record the purchase as always.
b) we are trading a liability for another. We do not receive for the note.
c) we discount on the note and we are goind to declare the interest expense at maturity or year-end against this discount.
Answer:
An asset exchange transaction which increases the cost of the purchased merchandise.
The firm gives the transportation company money (which is an asset) and since the transportation costs are included in the cost of the merchandise, the firm is paying a fraction of the cost of the asset.
When you are calculating the purchase cost of goods you must include the price of the goods, transportation costs, and any other associated expense like insurance costs and import fees, etc.
Transportation costs are only included in the COGS when the firm acquires the goods, but when the firm sells the goods, any distribution cost is not included under production costs, instead they are included under the sales costs.
