Accounting word problem help

Jan 16th, 2016
Anonymous
Category:
Accounting
Price: $10 USD

Question description

Cripple Creek Hardware Store currently uses a periodic inventory system. Hoyt Braxton, the owner, is considering the purchase of a computer system that would make it feasible to switch to a perpetual inventory system. Hoyt is unhappy with the periodic system because it does not provide timely information on inventory levels.

Hoyt has noticed on several occasions that the store runs out of good-selling items, while too many poor-selling are on hand. Hoyt is also concerned about lost sales while a physical inventory is being taken. The store currently takes a physical inventory twice a year. To minimize distractions, the store is closed on the day inventory is taken. Hoyt believes that closing the store is the only way to get an accurate count.

You have been brought in to assess the situation and provide expert advice on which course of action to take—remain with the current periodic inventory system or switch to a perpetual inventory system. Present your findings to Hoyt, discussing whether switching to a perpetual inventory system will strengthen Cripple Creek Hardware's control over inventory items and eliminate the need for a physical inventory count.


Tutor Answer

(Top Tutor) Studypool Tutor
School: Cornell University
PREMIUM TUTOR

Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1823 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors