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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