1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points) (Points : 20) 1. We have to close temporary accounts at the end of a period because when the temporary accounts are closed, it brings their balances back down to zero. 2. I would Debit Salary Expense and Credit to PayrollExpenses 12/31
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B1. Adequacy of Funds Finances are one of the most crucial parts of any business. Every business has to be aware of what type of resources, especially financial resources, it has available to work with. The financial aspect of a business determines almost every other aspect of that business. Being able to utilize budgets, in order to reduce costs and make profit, is imperative. Pro forma accounting is a way of using the budget to analyze what to expect in the future. This statement should
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THIS CHAPTER : 13.1.0 Definition Of Inventory : 13.2.0 Various Costs Related To Inventory Management : 13.3.0 Inventory Management - Constrains & Problems : 13.4.0 Economic Order Quantity : 13.5.0 Measuring Efficiency Of Inventory Management : 13.6.0 Inventory Control : DETAILS OF TOPICS COVERED IN THIS CHAPTER ARE AS FOLLOWS : 13.1.0 Definition Of Inventory : The Dictionary meaning of Inventory is 'a list of goods'. In a wider sense, inventory can be defined as an idle resource which
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Inventory Management | Intro to Logistics and Supply Chain Management | Susan Calhoun | Gettemeier, Alexandria | 4/1/2012 | Inventory Management “Inventory Management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory.” (BarcodesINC 1) An inventory manager supervises the product from the manufacturer to the warehouse where it is being stored; then from the point of sale to the customer. An inventory manager becomes involved in
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trays. McKnight’s beginning inventory for 2015 is 18,000 trays, and its target ending inventory is 27,000 trays. Compute the number of trays budgeted for production in 2015. 6-18 (5 min.) Direct materials purchases budget. Inglenook Co. produces wine. The company expects to produce 2,500,000 two-liter bottles of Chablis in 2015. Inglenook purchases empty glass bottles from an outside vendor. Its target ending inventory of such bottles is 80,000; its beginning inventory is 50,000. For simplicity
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business has a bank note 45 day’s in arrears, Reed’s has a bank note of $130,000 that comes due in 30 days the company also has $85,000 in cash reserves, $491,000 in inventory, and $413,000 in accounts in accounts receivable that need to be collected. Reed’s Clothier has meet its financial obligations, and the company needs to convert inventory into cash. To determine the financial standings of the company, a financial analysis will have to be done if Reed’s Clothier is to find the best way to raise the
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is based on cash flows. 5. _________ consider time value of money. 6. What are the main goals of financial management? 7. ________ lead to investment in real assets. 8. _____ relate to the acquisition of funds at the least cost. 9. Formulation of inventory policy is an important element of _______. 10. Obtaining finance is an important function of _________. 11. What are the two critical issues to be considered under investment decisions? 12. Define rate of return. 13. The most important decision made
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2 Materials BASIC CONCEPTS AND FORMULAE 1. Maximum Level: It indicates the maximum figure of inventory quantity held in stock at any time. 2. Minimum Level: It indicates the lowest figure of inventory balance, which must be maintained in hand at all times, so that there is no stoppage of production due to non-availability of inventory. 3. Re-order level: This level lies between minimum and the maximum levels in such a way that before the material ordered is received into the
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revenue $1,200 Net Cash provided by operating activities $114,500 Working note: 1 Accounts receivable Bal Dec 31, 2009 $58,600 Cash receipts $248,200 Sales $243,000 Bal Dec 31, 2010 $53,400 Working note: 2 Merchandise inventory Bal Dec 31, 2009 $79,000 COGS $65,000 Purchases $71,000 Bal Dec 31, 2010 $85,000 Accounts payable Cash payments $68,100 Bal Dec 31, 2009 $32,700 Purchases $71,000 Bal Dec 31, 2010 $35,600 Question 2 Jill’s
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the order quantity of inventory that minimizes the total cost of inventory management. Two most important categories of inventory costs are ordering costs and carrying costs. Ordering costs are costs that are incurred on obtaining additional inventories. They include costs incurred on communicating the order, transportation cost, etc. Carrying costs represent the costs incurred on holding inventory in hand. They include the opportunity cost of money held up in inventories, storage costs, spoilage
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