Inventory Presentation and Disclosures Under IFRS & ASPE
Included in the December

question 87

Essay

Inventory presentation and disclosures under IFRS & ASPE
Included in the December 31 trial balance of Watershed Company are the following assets:
$$\begin{array} { l r l r } \text { Cash } & \$ 201,700 & \text { Work in process } & \$ 180,000 \\\text { Equipment (net) } & 1,314,000 & \text { Receivables (net) } & 320,000 \\\text { Prepaid insurance } & 55,600 & \text { Patents } & 114,000 \\\text { Raw materials } & 279,250 & \text { Finished goods } & 212,500\end{array}$$
Watershed Company presents its expenses by nature of costs instead of by function.
Instructions
Prepare the current assets section of the December 31 statement of financial position for Watershed Company.

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Definitions:

Work in Process

Goods that are in production but have not yet completed the manufacturing process, considered a type of inventory on the balance sheet.

Finished Goods

A rephrased definition: Products that have completed the manufacturing process and are ready to be sold but are still in the company's inventory.

Raw Materials Inventory

The stock of materials before they are processed or used in the production of goods, part of a company's inventory of goods.

Indirect Materials

Indirect materials are supplies used in the production process that, unlike direct materials, are not part of the finished product, such as lubricants and cleaning supplies.