Question

Current assets for two different companies at fiscal year-end 2017 are listed here. One is a manufacturer, Exercise 18-7 Rayzer Skis Mfg. and the other, Sunrise Foods, is a grocery distribution company 1. Identify which set of numbers relates to the manufacturer and which to the merchandiser 2. Prepare the current asset section for each company from this information. Discuss why the current as- CA Balance sheet identific and preparation set section for these two companies is different. Account Company 1 Company 5,000 42,000 Cash Merchandise inventory 45,000 Finished goods inventory . Accounts receivable, net Prepaid expenses 30,000 50,000 75,000 900 62,000 .1,500

Answer 1

Q1.
Company 2 is a manufacture as it carries all three tyows if inventories which is carried only by the manufacturer
Q2.
Current Assets of Company1:
Cash			7000
Accounts recievable			62000
Merchandise Inventory			45000
Prepaid expense			1500
Total current assets			115500
Current Assets of Company2:
Cash			5000
Accounts recievable			75000
Raw material Inventory			42000
Work in process inventory			30000
Finished Goods inventory			50000
Prepaid expense			900
Total current assets			202900
Current asste section of these two companies is different for inclusion of different type of inventories in boh the companies.
The company1 includes Merchandise Inventory as it is involved in trading activities.
The Company2 includes the raw material, work in process, and finished goods inventory as it is invloved in manufacture.