Question

Current assets for two different companies at fiscal year-end are listed here. One is a manufacturer, Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company. Account Company 1 Company 2 Cash $ 11,000 $ 9,000 Raw materials inventory — 39,875 Merchandise inventory 42,875 — Work in process inventory — 29,000 Finished goods inventory — 49,000 Accounts receivable, net 56,000 75,000 Prepaid expenses 4,500 900 Required: 1. Identify which set of numbers relates to the manufacturer and which to the merchandiser. 2a. & 2b. Prepare the current asset section for each company from this information.

Answer 1

Requirement 1

Relating to manufacturer

Cash

Raw materials inventory

Work in process inventory

Finished goods inventory

Accounts receivable, net

Relating to merchandiser

Cash

Merchandise inventory

Accounts receivable, net

Prepaid expenses

Requirement 2

Company Rayzer Skis Mfg Sunrise Foods

Current Asset Section:

Cash 11,000 9,000

Raw materials inventory 39,875 N/A

Merchandise inventory N/A 42,875

Work in process inventory 29,000 N/A

Finished goods inventory 49,000 N/A

Accounts receivable, net 56,000 75,000

Prepaid expenses 4,500 900

Total 189,375 127,775

Explanation:

manufacturer produces goods then sells finished goods

merchandiser purchases goods for resale