What the problem-issue is or might be for the case

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Reference no: EM131876238

Question: Good Deals sells electronic equipment and household appliances. In order to improve employee morale, the company made an employee lounge that will contain a nicely equipped lunchroom. Equipment in the lounge includes two microwaves, a large screen television, a VCR, a fully equipped computer, a refrigerator, and a range. As a means of familiarizing the employees (especially the sales staff) with the features of the new produces, new equipment is taken from the showroom floor and placed in the lounge every few months. The old equipment is returned to the showroom and sold as demonstration units. On January 3, 2015, the manager of the store placed the first equipment in the lounge. On December 15, 2015, all of the original equipment was taken back to the showroom floor and new equipment was brought to the lounge.

What the problem/issue is or might be for the case?

Is there a "cost" of using the equipment in the lounge?

How should the presumed "cost" of using the equipment in the lounge be accounted for?

Should the equipment be removed from inventory when transferred to the lounge? If so, what would the offsetting account be?

Reference no: EM131876238

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