Accounting For Business Analysis.edited

Content type

User Generated

Subject

Accounting

School

Rasmussen University

Course

ACG 5500

Type

Homework

Uploaded By

znlaneqgbby059

Pages

Rating

Running head: ACCOUNTING FOR BUSINESS ANALYSIS 1

Accounting for Business Analysis

University

Student’s name

Course title

Professor’s name

Date

ACCOUNTING FOR BUSINESS ANALYSIS 2

MEMO

Date

To: Human Resources department of Costco

From:

Subject: Accounting for business analysis

Overview of Costco Wholesale

Costco is an American organization formed by James Sinegal, and Jeffrey Brotman in

1983to serve in the retail industry. Costco is a business organization that majorly sells its

products to members, thus generating revenue from membership fees and others from selling

products to the general public. The company operates in fifteen countries, with 831 warehouses

spread across the nation. The United States offers the largest market for Costco products, thus

having a total of 574 warehouses in the country. Some countries outside the United States where

Costco sells its products include Canada, Mexico, Japan, the United Kingdom, South Korea,

Taiwan, and Australia. Costco operates in an oligopoly market stricture because it has few

competitors that operate at its levels, such as Amazon and Wal-Mart. The organization sells a

wide range of products to individuals who are club members (Palepu et al., 2020). The

organization uses Kirkland Signature as its brand name for selling different products. In addition

to the products, the firm offers a wide range of members-only services, including auto program,

optical services, business services, concierge services, travel services, and many others.

Accounts classification

A balance sheet consists of three accounts: assets, liabilities, and equity. The assets are

divided into two groups: current and non-current. The liabilities are grouped into two categories,

which are current and long-term liabilities. The last account in the balance sheet is equity, which

ACCOUNTING FOR BUSINESS ANALYSIS 3

includes common stock, preferred stock, and retained earnings (Costco Wholesale Corporation,

2018). The current assets include cash & cash equivalents, short-term investment, inventories,

and receivables.

On the other hand, non-current assets are land, buildings, and equipment. The current

liabilities are accounts payables, accrued salaries, accrued rent, and many others. The long-term

liabilities include long-term debts.

The accounts in the income statement are revenues and expenses. The organization

generates revenue from the sales of goods and services. On the other hand, the organization has a

wide range of expenses that include operating expenses, interest expenses, and provision for

income taxes. The relationship between the two accounts is that the net income is added to the

previous year’s balance to get retained earnings—the earnings from the income statement help

determine the year's equity on the balance sheet.

Components of balance sheets and income statements of different industries

Manufacturing companies produce and sell various products to individuals and

organizations. Examples of manufacturing companies are General Electric, Ford, and Apple. The

income statement of a manufacturing company consists of sales revenue and expenses that

include cost of goods sold, depreciation, research & development, selling, general &

administrative expenses, interest, and income tax expenses. The balance sheet of a

manufacturing company consists of assets, liabilities, and equity. The unique item in the current

assets category includes finished goods and raw materials under inventory.

The service industry consists of companies that offer a wide range of services at a cost.

Examples of service companies are Deloitte and AT & T. The service companies’ income

statement is similar to other income statements from other industries but lacks the cost of goods

End of Preview - Want to read all 8 pages?

Access Now

Unformatted Attachment Preview

Running head: ACCOUNTING FOR BUSINESS ANALYSIS Accounting for Business Analysis University Student’s name Course title Professor’s name Date 1 ACCOUNTING FOR BUSINESS ANALYSIS 2 MEMO Date To: Human Resources department of Costco From: Subject: Accounting for business analysis Overview of Costco Wholesale Costco is an American organization formed by James Sinegal, and Jeffrey Brotman in 1983to serve in the retail industry. Costco is a business organization that majorly sells its products to members, thus generating revenue from membership fees and others from selling products to the general public. The company operates in fifteen countries, with 831 warehouses spread across the nation. The United States offers the largest market for Costco products, thus having a total of 574 warehouses in the country. Some countries outside the United States where Costco sells its products include Canada, Mexico, Japan, the United Kingdom, South Korea, Taiwan, and Australia. Costco operates in an oligopoly market stricture because it has few competitors that operate at its levels, such as Amazon and Wal-Mart. The organization sells a wide range of products to individuals who are club members (Palepu et al., 2020). The organization uses Kirkland Signature as its brand name for selling different products. In addition to the products, the firm offers a wide range of members-only services, including auto program, optical services, business services, concierge services, travel services, ...
Purchase document to see full attachment