Acc 290 Week 4

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Acc 290 Week 4,

1-One can determine the cost of goods sold when using a periodic inventory system does not calculate the cost of goods sold until the end of the period. At the end of the period a count is done to determine the ending balance of the inventory. After this is completed the cost of goods sold

2-

The perpetual system of inventory keeps a running tally of inventory that is live and this is done by automatically making changes to the inventory as each item is sold, freight cost, returned, or

3-

The reason behind understanding value of inventory at a point in time is to accurately report what the value of the inventory (asset) is for a company. If the asset of a company is worth less than what the market is willing to pay for it than the company will not make money on selling those goods. Also, knowing the price the inventory was purchased at compared to what the market price



Week 4 Problems

Date Accounts Debit Credit
July 1 Cash 12,000 12,000
1 Equipment 8,000 6,000
2,000

3 Supplies 900 900
5 Prepaid Insur. 1,800 1,800
12 Accounts Rec. 3,700 3,700
18 Accounts Pay. 1,500 1,500
20 Salary Exp. 2,000 2,000
21 Cash 1,600 1,600
25 Accounts Rec. 2,500 2,500

Financial Reporting Problem, Part I

The company’s annual report is important because it gives the shareholders a clear picture and understanding about how the company is doing financially. The annual reports provide thorough information on very significant section of the accounts, such as the balance sheet, the income statement, and the cash flow statement. The information presented in the annual report would also be essential to potential investor, employee, and any other people that may have interest in financial aspect of the business.

The company’s total assets at the end of 2009 were $39,848,000 (PepsiCo, n.d.). However, in 2010 its most recent annual report…...

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