Environmental effects of consolidating farms
Held for sale in the ordinary course of business b. To be currently consumed in the production of goods or service to be available for sale".inventory includes retail merchandise, manufactured finished goods, work in process, and raw materials and supplies.
Typically the cost of inventory also includes any duties, transportation, warehouse, insurance and any costs associated with getting the goods available for sale.
Under the perpetual system, a sale or sales return can be recorded with a compound journal entry.
Periodic Inventory System Under a periodic system, inventory is only updated periodically (typically at the end of the period) by doing a physical inventory count.
For retail organizations, merchandise inventory can be an asset or a liability.
When it moves along at a healthy clip it is an asset, one that adds to the bottom line.
Moving-average cost is the same, but allows a weighted average cost to be used under a perpetual inventory system. Swan Limited follows the practice of closing of its books on 31 March every year.
The company was considering an offer to sell off the business at the beginning of 2014 but due to some differences the deal was not finalized and the company carried out stock taking on 10 March 2014.
What characteristics do auditors look for in the review of a client's inventory-taking instructions?
If customers are slow to take to it or, worse, find it unattractive, the merchandise inventory becomes a liability, one that ties up cash and decreases in value o When are profits on intercorporate sales considered to be realized? How are unrealized profits on current-period intercorporate sales treated in preparing the income statement for (a) the selling company and (b) the consolidated entity? How do unrealized intercompany inventory profits from a prior period affect the computation of consolidated net income when the inventory is resold in the current period? Distinguish between an upstream sale of inventory and a downstream sale.
Is it important to know if the sale was upstream or downstream? Why is it important to know whether a sale is upstream or downstream?
When a sale or sales return occurs under the periodic system, we simply record the sale and corresponding accounts receivable.
Although we know that the sales has reduced our inventory, we do not update the inventory account at the time of the same.
Search for environmental effects of consolidating farms:
Similarly, any purchase discounts are subtracted from the cost of inventory.