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AC/113 AC113 AC 113 Unit 5 Discussion

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AC 113 Unit 5 Discussion Accounting for the sale of merchandise, purchase of merchandise, and accounting for freight and sales tax is important for a Merchandising business. In Merchandising businesses, there is a dual nature to the transactions. In this Discussion, you will look at merchandise shrinkage as well as the financial statements for a merchandising business. This week’s Discussion focuses on Activity 4-2 located on page 169 of your textbook, which reads as follows: The Laurel Co. is owned and operated by Paul Laurel. The following is an excerpt from a conversation between Paul Laurel and Maria Fuller, the chief accountant for The Laurel Co.: Paul: Maria, I have a question about this recent balance sheet. Maria: Sure, what’s your question? Paul: Well, as you know, I’m applying for a bank loan to finance our new store in Clinton, and I noticed that the accounts payable are listed as $180,000. Maria: That’s right. Approximately $150,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Paul: That’s what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Maria: That’s right. I can’t remember the last time we missed a discount. Paul: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let’s list the accounts payable due suppliers as $147,000 rather than $150,000. Every little bit helps. You never know. It might make the difference between getting the loan and not. How would you respond to Paul Laurel’s request? Accounts Assignment Help, Accounts Homework help, Accounts Study Help, Accounts Course Help

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