Financial Accounting
Costa Company
Income Statement
Revenue
COGS
Gross Profit
less
Depreciation Expense
Insurance
Marketing
Misc Exp
Property Taxes
Rent
Salaries
Utilities
Operating Expenses
Net Income
Balance Sheet
Assets
Cash
Accounts Receivable
Inventory
Equipment
Total Assets
Liabilities
Accounts Payable
Long-Term Debt
Total Liabilities
Shareholders' Equity
Common Stock
Paid-In Capital
Retained Earnings
Total Equity
Total L&SE
With these two statements, there are two adjustments that have been requested. The $12,000 check cannot be processed yet. The sale needs to be recorded. The problem is that the sale will include inventories that moved, but without knowing what inventories were moved and what the markup would be, this cannot be done. If we assume $12,000 in inventory (though this is unlikely), we can process this. Very little changes -- not the size of the firm nor the profits, until we can determine how much inventory we have.
Again, with the physical inventory count,...
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