Morrissey Forgings, Inc. Essay

4. What inventory method is used to value inventories? Does this method reflect current cost at year-end?

Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.

Merchandising inventory is goods that have been acquired by a distributer, wholesaler, or retailer from suppliers with the intent of selling the goods to third parties. (Accountingtools.com, 2015) When choosing the type of method to use for merchandising inventory it is important for the business to understand what type of services or goods that are being provided. This can offer a better insight to the proper and most cost effective method. When deciding there are four types of inventory cost methods to elect from.

Accounts Receivable, Other Receivables, Allowance for Doubtful Accounts, Bad Debt ExpenseInventories and Reserve for Inventory Obsolescence

Ending inventory amount is shown as an asset on the balance sheet, which happens to be true for all three inventory valuation methods.

a. What was TECO’s expected rate of return at the beginning of 1992? Value Line estimate

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

Partially determined the types of inventories these companies currently manage; Partially described their essential inventory characteristics.

Merchandise Inventory is a material acquired by a retailer for the purpose of selling it to the third party. The three methods

goods. They can also be in process between different locations. Holding of inventories can cost a

Castillo Products improved from an operating loss in 2009 to profitability in 2010. The net profit margin went from negative to positive. The asset turnover (total-sales-to-total-assets)

8) What would BV's 1988 earnings per share be after all of the above adjustments?

Management of a company would probably be most interested in viewing the Operating Activities section of the Statement of Cash Flows. This section pinpoints the exact inventories, liabilities, depreciation and receivables of the company during a certain time period. So managers are able to see what operations are occurring, what type of inventory is on hand and what the assets and liabilities of the company are.

The results of the company’s return on assets ratio measuring profitability overall was 7.2% in 2010 and 8.1% in 2011 having an increase of 0.9%. Return of common stock ratio that portrays the

The term inventory embraces goods awaiting sale (the merchandise of a trading concern and the finished goods of a manufacturer), goods in the course of production (work in process), and goods to be consumed directly or indirectly in production (raw materials and supplies). This definition of inventories excludes long-term assets subject to depreciation accounting, or goods which, when put into use, will be so classified. The fact that a depreciable asset is retired from regular use and held for sale does not indicate that the item should be classified as part of the inventory. Raw materials and supplies purchased for production may be used or consumed for the construction of long-term assets or other purposes not related to production, but the fact that inventory items representing a small portion of the total may not be absorbed ultimately in the production process does not require separate classification. By trade practice, operating materials and supplies of certain types of entities such as oil producers are usually treated as inventory.”