Asset Valuation

Introduction

At the urging of a long time desire, Barbara Jones and Rachel Hoskins recently unyielding to open their very own purse store, which will be called Purse Bouquet and Fashion. Barbara and Rachel who some(prenominal) have a wrath for fine purses and accessories, will sell luxury handbags, purses, backpacks, luggage and some other exquisite items to the Greater Baltimore Maryland area via their luxury dress shop store and the Internet. Upon the establishment of their newly start-up retail order, they have unyielding to sell the following brands; Samsonite, Jansport, Liz Claiborne, Fendi, Gucci, and Coach. The good thing about Barbara and Rachel is that they both have an incredible knowledge about their products and how to make a sale. However, their accounting experience is very limited. They have trained faculty members in place that will provide them service found on their expertise, which will ensure that their financial office has teeming coverage. Our accounting firm, Value Builder Inc, has provide assistance in making sure that the Inventory, Capitalization and justification policies are created and instituted originally the establishment of their retail store.

PBF Inventory Policy

Inventories can be delimitate as assets that are think for sale, are in march of being produced for sale, or are to be used in producing goods. (http://www.investopedia.com/article/02/060502.



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For many companies inventory represents the largest portion of assets, because inventory is an weighty part of a companys balance sheet. A companys inventory is set(p) by the following equation, Beginning inventory + Net purchases - equal of goods exchange = Ending inventory. To simplify this equation, it means that you take what the company has in the beginning, add the new purchases, subtract what the company sold and the result is what is left.

        Purse Bouquet & Fashions has inventory that is intended for sale. The companys...

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