Asset Valuation Essay by Peter Pen

Asset Valuation
An examination of asset valuation in a fictitious company by an external consulting firm.
# 61134 | 2,349 words | 4 sources | MLA | 2005
Published on Sep 20, 2005 in Business (Companies) , Business (Finance, Investment and Banking)

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The CEO of The CD Rack has contacted The C-Team (a local consulting firm) asking for recommendations on reporting and valuing various assets. This paper examines how the C-Team discusses and gives justifications of each of the policies and shows how the policies will support The CD Rack in meeting their business goals. It explains that The CD Rack is an up and coming, start-up retail company that sells CDs from every music genre imaginable. The CD Rack also sells accessories associated with CDs such as CD storage cases and storage units, and accessories for cleaning and protecting CDs.
Inventory Policy
Capitalization Policy
Depreciation Methods

From the Paper:

"A variety of cost-flow assumptions are available for determining the cost of goods sold and the cost of maintaining inventory on hand. Note the word "assumption". Companies make certain assumptions about which goods are sold and which goods remain in inventory. This is for financial reporting and tax purposes only and does not have to agree with the actual movement of goods. The only requirement is: The total cost of goods sold plus the cost of the goods remaining in ending inventory for financial and tax purposes is equal to the actual cost of goods available (Inventory Cost Flow Assumptions, n.d.). Cost of goods sold is a figure reflecting the cost of the product or good that a company sells to generate revenue, appearing on the income statement as an expense unto itself, also referred to as "cost of sales." "

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