Decision Case 1:
Assume you are opening a Bed Bath & Beyond store. To Finance the business, you need a $500,000 loan, and your banker requires a set of forecasted financial statements. Assume you are preparing the statements and must make some decisions about how to do the accounting for the business. Answer the following questions (refer back to Chapter 5 if necessary).
1: Which type of inventory system will you use? Give your reason.
2: Show how to compute net purchases and net sales. How will you treat the cost of transportation?