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