Reference no: EM132603181

Consider the following cost items:

1. Salaries of players on the Boston Red Sox.

2. Year-end completed goods of Levi Strauss jeans.

3. Executive compensation costs at Home Depot.

4. Advertising costs for Sony.

5. Costs incurred during the period to insure a Ford plant against fire and flood losses.

6. Current year's depreciation on a Carnival Cruise Line ship.

7. The cost of printer ink and paper used during the period by Shutterfly.

8. Assembly-line wage cost incurred at a Kona bicycle plant.

9. Year-end production in process at Lenovo computer manufacturer.

10. The cost of products sold to customers of a Target store.

11. The cost of products sold to distributors of carpet manufacturer Shaw Floors.

Required:

Question 1: Evaluate the costs just cited, and determine whether the associated dollar amounts would be found on the firm's balance sheet, income statement, or schedule of cost-of-goods-manufactured. (Note: In some cases, more than one answer will apply.)

Question 2: What major asset will normally be insignificant for service enterprises and relatively substantial for retailers, wholesalers, and manufacturers? Briefly discuss.

Question 3: Briefly explain the major differences between income statements of service enterprises versus those of retailers, wholesalers, and manufacturers.