Because Natalie has had such successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of European mixers. The owners of Kzinski supply company has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is $575, and Natalie would sell each one for $1,150.
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Write My Essay For MeNatalie has come to you for your advice on how to account for these mixers and asks you the questions below, which you must address.
1 would you consider these mixers to be inventory, or should these mixers be classified as supplies or equipment?
2 which inventory tracking system should Natalie use: perpetual or periodic?
3 which system do you think is better: perpetual or periodic?
4 which system would you recommend for the type of inventory that Natalie wants to sell?
5 How often does Natalie need to count inventory if she maintains it using the perpetual system? In contrast, does she need to count inventory at all?
SAMPLE SOLUTION
Whether the Mixers are to be Considered as Inventory, Supplies or Equipment
Natalie should consider the mixers as inventory since she can opt to buy and stock the mixers for resale or as a distributor, stock the mixers. Once all the stock has been cleared, she can make another order from the Kzinski supply company. Although inventories are often treated as consumables that last for a short while and hence don’t need to be closely monitored, knowing the quantity in stock is key for reordering when | GET AN EXPERT FOR YOUR ASSIGNMENT | mixers are used as inventories since Natalie only acts as an avenue through which the supplier gets the consumer’s mixers. Therefore, the mixers can rightly be equated to consumables or disposables that companies don’t have to monitor their utility in the business …| GET AN EXPERT FOR YOUR ASSIGNMENT |y system is a system that relies on the occasional physical count to determine the level of inventory as well as the cost of goods sold. Unlike the periodic system, which is only used in predefined periods, perpetual systems often continuously keep track…
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