Lecture 9 - 09.27.23

Groupon, Kimberly Clark, Stone Ridge, Sherwin Williams Ch. 6 Goods on Consignment - This occurs when a company gives inventory to another company to sell for them. - The Manufacturer would report the inventory for this on their balance sheet even though they have given it to (X company) to sell it for them. Reporting Gross Profit - Gross Method o Can only use it if you have ownership characteristics. (Risks of being an owner). Cannot use it if acting as a middleman. Or broker. - Net Method o See Notepad Lower of Cost and Net Realizable Value - Inventory recorded at less than cost when: o The future value of inventory is lower than cost due to damage, usage, obsolescence, etc. o Or if it can be replaced at less than the original cost.
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