Consider the following cost items:
1. Salaries of players on the Boston Red Sox.
2. Year-end completed goods of Levi Strauss jeans.
3. Executive compensation costs at Home Depot.
4. Advertising costs for Sony.
5. Costs incurred during the period to insure a Ford plantagainst fire and flood losses.
6. Current year’s depreciation on a Carnival Cruise Lineship.
7. The cost of printer ink and paper used during the period byShutterfly.
8. Assembly-line wage cost incurred at a Kona bicycle plant.
9. Year-end production in process at Lenovo computermanufacturer.
10. The cost of products sold to customers of a Targetstore.
11. The cost of products sold to distributors of carpetmanufacturer Shaw Floors.
Required:
1. Evaluate the costs just cited, and determine whether theassociated dollar amounts would be found
on the firm’s balance sheet, income statement, or schedule ofcost-of-goods-manufactured. (Note:
In some cases, more than one answer will apply.)
2. What major asset will normally be insignificant for serviceenterprises and relatively substantial
for retailers, wholesalers, and manufacturers? Brieflydiscuss.
3. Briefly explain the major differences between incomestatements of service enterprises versus
those of retailers, wholesalers, and manufacturers.
