ADMN 3221H Lecture Notes - Lecture 8: Inventory Turnover, Equity Method, Financial Statement
30 Mar 2020
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Whichever is lower, net realizable value (estimated selling price estimated disposal price) or cost. To adjust: debit cogs, credit inventory. The following information is required: total cost and retail value of purchased goods, total cost and retail value of goods available for sale, sales for the period. Can approximate ending inventory without a count. Requires decisions related to accounting for freight costs, purchase returns, purchase allowances, transfers- in, employee discounts, normal shortages, abnormal shortages. Types: debt, equity, most of the time buying equity from a publically traded company. Financing: cash, exchanges of shares, want shares in another company to form relationships, some specific reason, leverage. Access to distribution channels broader market. Consolidating: line by line financial statement from company a and company b and adding them together, a = over 50% of company b"s shares acquired means consolidation. Equity: not cast in stone, significant influence, elect a board member, exchange of senior personnel.
