Microsoft Word peachtree case study
Table 10 Balance Sheet Normalization Adjustments
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| Table 10 Balance Sheet Normalization Adjustments In addition, it is important to note some of the normalization adjustments that are typically made during this process that were not made in the case of Note Item Basis Non‐Controlling Interest Affect Description & Discussion 1 Inventory Comparability NO Peachtree Plumbing currently utilizes a LIFO policy when managing their inventory. We adjusted inventory under LIFO for tax purposes to $53,650 as of 6/30/2006. Shirley Jones indicated at site visit that the ratio between inventory's FIFO values and the Company's revenue has not encountered much change in the past. With that, the ratio of 0.74% ($53,650 (FIFO inventory Revenue) is used to normalize the inventory items on the historic balance sheet in each year from 2002 to 2005 2 Short‐term Investments Non‐Operating NO The company carries a large balance in short term investments. Site meeting with Shirley Jones revealed these are nonessential today today management of the business and are removed from the balance. 3 Land Non‐Operating NO The company owns land that is adjacent to the current operating location and is intended for future expansion. Any potential sale of Peachtree Plumbing would include this adjacent land. It's current market value is $900,000 and it is treated as non‐operating property by Peachtree Plumbing. Deposits Non‐Operating NO Peachtree Plumbing uses Wells Fargo bank as their primary financial institution. The company owns various CDs issued by the bank and are non‐operating and nonessential in the operation of the business. Total Equity YES Cumulative impact of adjustments in Notes 1,2,3, & 4. Refer to following schedule for the balance sheet impact by year of adjustment required. Download 0.84 Mb. Share with your friends:
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