Illustrates the reporting of inventory on the balance sheet for a merchandising and a manufacturing…
Illustrates the reporting of inventory on the balance sheet for a merchandising and a manufacturing business. MusicLand Stores, Inc., a retailer of musical instruments, reports only Merchandise Inventory. In contrast, Legend Guitars, manufacturer of guitars, reports Finished Goods, Work in Process, and Materials inventories. In both balance sheets, inventory is reported in the Current Assets section.
MusicLand Stores, Inc.
Balance Sheet
December 31, 2012
Current assets:
Cash
$25,000
Accounts receivable (net)
85,000
Merchandise inventory
142,000
Supplies
10,000
Total current assets
$262,000
Legend Guitars
Balance Sheet
December 31, 2012
Current assets:
Cash
$21,000
Accounts receivable (net)
120,000
Inventories:
Finished goods
$62,500
Work in process
24,000
Materials
35,000
121,500
Supplies
2,000
Total current assets
$264,500
