Assume you are opening a Bed, Bath and Beyond store. To financethe business, you need a $500,000 loan, and your banker requires aset of forecasted financial statements. Assume you are preparingthe statements and must make some decisions about how to do theaccounting for the business. Answer the following questions:
1) Which type of inventory system will you use? Give areason.
2) Show how to compute net purchases and net sales. How will youtreat the cost of transportation in?
3) How often do you plan to do a physical count of inventory onhand? What will the physical count accomplish?
4) Inventory costs are rising. Which invnetory costing method willyou use in order to:
a) Maximize net income?
b) Pay the least amount of income tax?
Assume you are opening a Bed, Bath and Beyond store. To financethe business, you need a $500,000 loan, and your banker requires aset of forecasted financial statements. Assume you are preparingthe statements and must make some decisions about how to do theaccounting for the business. Answer the following questions:
1) Which type of inventory system will you use? Give areason.
2) Show how to compute net purchases and net sales. How will youtreat the cost of transportation in?
3) How often do you plan to do a physical count of inventory onhand? What will the physical count accomplish?
4) Inventory costs are rising. Which invnetory costing method willyou use in order to:
a) Maximize net income?
b) Pay the least amount of income tax?
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