Question

[The following information applies to the questions displayed below.) Current assets for two different companies at fiscal year-end 2015 are listed here. One is a manufacturer Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company. Account Cash Raw materials Inventory Merchandise Inventory Work in process Inventory Finished goods Inventory Accounts receivable, net Prepaid expenses Company 1 Company 2 $ 7.000 $5,000 42.000 45.000 30,000 50.000 62,000 75.000 1,500 900 value: 5.26 points (1-a) Based on the amounts, identify which of these company is manufacturer Company 1 Company 2 (1.b) Based on the amounts, identify which of these company is a merchandiser Company 1 Company 2

Answer 1

Razor Skis Manufacturing Sunrise Foods la.Company 2 Razor Skis Manufacturing is a Manufacturing Company with 3 inventory categories (Raw materials, Work in Process, Finished Goods) la. Company 1 is a merchandising firm with ony one inventory item, Merchandise Inventory Sunrise Foods Balance sheet - Current Assets Section December 31, 2015 Cash 7000 Merchandise Inventory 45000 Accounts Receivable 62000 Prepaid Expenses 1500 Razor Skis Manufacturing Balance sheet - Current Assets Section December 31, 2015 Cash 5000 Raw Materials Inventory 42000 Work in Process Inventory 30000 Finished Goods Inventory 50000 Accounts Receivable 75000 Prepaid Expenses 900 Total Current Assets 115500 Total Current Assets 202900