Ormiston Ltd. (Ormiston) is a Canadian manufacturer of wooden shingles. Ormiston purchases lumber from sawmills and manufactures
Question:
The amount of the loan is based on accounts receivable and inventory outstanding on the last day of each calendar month. Ormiston has usually borrowed the maximum amount allowable under the borrowing agreement. Ormiston pays surplus cash (cash that isn't required for operations and is available after paying of debts) out to its share holders. Note that lumber prices tend to be quite volatile.
Required:
Prepare a report to Ormiston's management recommending accounting policies for inventory. Management is determining appropriate policies for when it goes public as well as to satisfy its other requirements. Your report should fully explain your recommendations.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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