Case ID: 113122
Solution ID: 1108
Words: 1210
Price $ 75

Justin Anson Distillery Inc Case Solution

Abstract

A distiller increases whiskey production and earnings declines because of accounting techniques getting used. Questions are elevated regarding dealing with costs which might be considered production, inventory, or period costs. The needed maturing boosts added queries about prior period restatements and needed financing. A rewritten type of a young case by R.F. Vancil and R.H. Deming.

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Excel Calculations

Barrel Cost

Justin Anson Distillery, Inc. Statement of  income

For the year ended June 30, 2011 and 2012

 

All costs

Justin Anson Distillery, Inc. Statement of  income

For the year ended June 30, 2011 and 2012

 

Differences

Effect of changing inventory Calculations

Effect On Balance Sheet

Effect On Income Statement

Questions Covered

Assuming Anson decided to charge barrel costs (but not warehousing and aging costs) to inventory, what 2012 income statement and balance sheet items would change, and what would the new amounts be? (Assume no change in work-in-process inventory.)

If Anson’s suggestion of including all warehousing and aging costs in inventory were accepted, how would the 2012 financial statements be affected? (Assume no change in work-in-process inventory.)

In your opinion, what costs should be included in Anson’s inventory when preparing financial statements to be submitted to Valley National Bank?