Reference no: EM132951730

Problem 1: Mayo Clinic's accounting problem with its stockpile of protective gear due to pandemic As the Mayo Clinic was rolling out its response to the coronavirus pandemic, its finance team was trying to figure out how best to classify a reserve of masks and gloves: expense or inventory? The Mayo Clinic ran into the question of how to account for protective gear after it purchased a stockpile in late February to early March. Previously, the hospital system had recognized gear as inventory if it was stored in a warehouse; if the gear were kept at a clinical facility or on a hospital floor, it would be recognized as an expense. The finance team argued that such equipment should be considered inventory even if it weren't in a warehouse. "They shouldn't have been expensed." Do you agree? Why or why not? How would the inventory vs expense classificiation affect Mayo Clinic's financial statements?