illustrates the reporting of inventory on the balance sheet for a merchandising and 665419
Illustrates the reporting of inventory on the balance sheet for a merchandising and a manufacturing business. MusicLand Stores, Inc., a retailer of musical instruments, reports only Merchandise Inventory. In contrast, Legend Guitars, manufacturer of guitars, reports Finished Goods, Work in Process, and Materials inventories. In both balance sheets, inventory is reported in the Current Assets section.
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MusicLand Stores, Inc. |
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Current assets: |
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Cash |
$25,000 |
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Accounts receivable (net) |
85,000 |
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Merchandise inventory |
142,000 |
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Supplies |
10,000 |
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Total current assets |
$262,000 |
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Legend Guitars |
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Current assets: |
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Cash |
$21,000 |
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Accounts receivable (net) |
120,000 |
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Inventories: |
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Finished goods |
$62,500 |
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Work in process |
24,000 |
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Materials |
35,000 |
121,500 |
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Supplies |
2,000 |
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Total current assets |
$264,500 |
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