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 $ 13,000 $ 11,000 Raw materials inventory — 46,750 Merchandise inventory 49,750 — Work in process inventory — 34,000 Finished goods inventory — 54,000 Accounts receivable, net 58,000 72,000 Prepaid expenses 2,500 500 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:

Part 1

Manufacturer = Company 2

Merchandiser = Company 1

Part 2

Current Assets Section for Company 1

Current Assets                                            $

Merchandise Inventory                           41,500

Accounts Receivable, Net                     60,000

Prepaid Expenses                                    5,000

Cash                                                          7,000

Total Current Assets                              113,500

Current Assets Section For Company 2

Current Assets                                           $

Raw Materials Inventory                        38,500

Work In Process Inventory                    28,000

Finished Goods Inventory                     48,000

Accounts Receivable, Net                     70,000

Prepaid Expenses                                     1,000

Cash                                                         5,000

Total Current Assets                             190,500

Explanation:

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