In its most recent annual report, Appalachian Beverages reported current assets of $49,300 and a current ratio of 1.70. Assume that the following transactions were completed: (1) purchased merchandise for $5,900 on account and (2) purchased a delivery truck for $10,000, paying $2,000 cash and signing a two-year promissory note for the balance. Required: Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions in the following table. (Round your answers to 2 decimal places.) Current Ratio Transaction (1) Transaction (2)

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.