The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31, 2008:
Raw materials $17,000 $19,000
Work in process 9,000 14,000
Finished goods 11,000 8,000
Total $37,000 $41,000
In addition, the following transactions occurred in 2008:
1. Raw materials purchased on account, $95,000.
2. Incurred factory labor, $110,000, all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $11,800, Depreciation on manufacturing machinery $10,000, Manufacturing machinery repairs $9,200, Factory insurance $9,000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $110,000 of factory labor to jobs.
5. Applied $44,000 of overhead to jobs.
Journalize the above transactions using T-Accounts.
The solution journalizes transactions using t-accounts for inventory for Ricci Manufacturing Corporation.
Financial Reporting Annual Notes
Obtain the most recent annual financial statements and notes (annual report or 10-K) for Monro Muffler Brake, Inc. (MNRO).
You are asked only for selected financial statement analysis of your company. In your report, discuss trends, financial position, ratios, etc. only if relevant for evaluating the quality of reported financial information or specifically required by the project. For example, it may be helpful to discuss inventory turnover when assessing inventory valuation risk.
To assess a company's financial statements, think specifically about: (1) the types of underlying transactions and events that affect the company, (2) how well the financial accounting rules (i.e., GAAP) reflect those transactions and events, (3) the aggressiveness or conservatism of management's accounting choices, and (4) how the annual report helps you assess the company's risks, financial position, and profitability.
Additional valuable information about the Company is in the MD&A report. This information may help you understand the company's business policies and practices.
For each item below, provide an easy to read and understandable presentation of the facts for your company.
1. REVENUE RECOGNITION AND RECEIVABLES VALUATION:
? Types of revenue transactions (e.g., cash, credit, or advance customer orders, etc.)
? Importance and role of accounts receivable to the company
? Potential for abuse of accounts receivable
2. COST OF GOODS SOLD AND INVENTORY VALUATION:
? Importance and role of inventory for this company
? The inventory valuation method(s)
? Major inventory valuation risks for this industry (e.g., obsolescence, declining demand, fluctuating costs, technological change, or other)
? Potential for abuse of inventory in financial reporting (explain how if it is likely)
Link for 10K: morningstar.com ( http://quote.morningstar.com/stock-filing/Annual-Report/2011/3/26/t.aspx?t=XNAS:MNRO&ft=10-K&d=494a5ad12f3cde1f4e477c4bd3c24f2b)View Full Posting Details