Nestlé's financial statements are presented in Appendix B. Financial statements for Petra Foods are presented in Appendix C.
Instructions
(a) Based on the information contained in the financial statements, determine the normal balance of the listed accounts for each company.
Nestlé Petra Foods
1. Inventory................................1. Accounts (Trade) Receivable
2. Property, Plant, and Equipment........2. Cash and Cash Equivalents
3. Accounts (Trade) Payable...................3. Cost of Sales (expense)
4. Interest Expense (finance cost)............................4. Sales (revenue)
(b) Identify the other account ordinarily involved when:
(1) Accounts (Trade) Receivable is increased.
(2) Salaries and Wages Payable is decreased.
(3) Property, Plant, and Equipment is increased.
(4) Interest Expense is increased.