Chapter 18, Problem 7E

To determine

Manufacturer is the person who procures the goods through a process; convert the raw material into finished goods and then sale the converted goods is known as manufacturers.

Merchandiser is the person who procures the goods and sale them with any process i.e. as it is is known as merchandiser.

In merchandise, the inventory is in one form only i.e. merchandise inventory

In manufacturing, generally the inventory is in three forms; Raw material, work in progress and finished goods.

To determine:

In the given question, data related to Balance Sheet and P & L is given for two different companies. We have to identify the below:

1. Which set of numbers relate to manufacturer and which set relates to merchandiser

2. Preparation of current asset section for these 2 companies and why the current asset section is different for these 2 companies.