Question

Required:
(1) Identify which set of numbers relates to the manufacturer and which to the merchandiser.
(2) Prepare the current asset section for each company from this information.

Current assets for two different companies at fiscal year-end 2017 are listed here. One is a manufacturer, Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company.

Account	Company 1				Company 2
Cash		$	7,000			$	5,000
Raw materials inventory			—				39,875
Merchandise inventory			42,875				—
Work in process inventory			—				29,000
Finished goods inventory			—				49,000
Accounts receivable, net			61,000				67,000
Prepaid expenses			3,500				700

Answer 1

Answer
1 )
company 2 has Raw materials inventory WIP and Finished Goods inventory.that means it is involved on manufacturing. Hence it is manufacturer.
Company 1 has merchandise inventory and not having any raw material or WIP or Finished goods inventory. Hence it is a merchandiser.
				2)   Prepare the Current assets section of each company
Particulars	Company 1 $	Company 2 $
Cash	7,000	5,000
Raw materials inventory		39,875
Merchandise inventory	42,875
Work in process inventory		29,000
Finished goods inventory		49,000
Accounts receivable, net	61,000	67,000
Prepaid expenses	3,500	700
Total Current Assets	1,14,375	1,90,575