Question

Current assets for two different companies at fiscal year-end are listed here. One is a manufacturer, Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company. Account Company 1 Company 2 Cash $ 11,000 $ 9,000 Raw materials inventory — 39,875 Merchandise inventory 42,875 — Work in process inventory — 29,000 Finished goods inventory — 49,000 Accounts receivable, net 56,000 75,000 Prepaid expenses 4,500 900 Required: 1. Identify which set of numbers relates to the manufacturer and which to the merchandiser. 2a. & 2b. Prepare the current asset section for each company from this information.

Answer 1

Answer:

Requirement 1

Relating to manufacturer

Cash

Raw materials inventory

Work in process inventory

Finished goods inventory

Accounts receivable, net

Relating to merchandiser

Cash

Merchandise inventory

Accounts receivable, net

Prepaid expenses

Requirement 2

Company                                            Rayzer Skis Mfg              Sunrise Foods

Current Asset Section:

Cash                                                               11,000                                9,000

Raw materials inventory                              39,875                                 N/A

Merchandise inventory                                  N/A                                   42,875

Work in process inventory                          29,000                                 N/A

Finished goods inventory                           49,000                                 N/A

Accounts receivable, net                            56,000                              75,000

Prepaid expenses                                         4,500                                  900

Total                                                            189,375                              127,775

Explanation:

manufacturer produces goods then sells finished goods

merchandiser purchases goods for resale