But We Do Have Inventory, and It Does Have Problems
The Mountain Top Realty Company has decided to develop the mountain area around Hitown and has purchased several plots of mountainside property. In addition, the company acts as a realtor for existing homes in the area. Greg Hatch has recently graduated from school with an accounting degree and has been hired to work as Mountain Top’s accountant. Greg’s favorite topic in intermediate accounting was inventory, and he’s disappointed that he works for a firm without any inventory and its related problems. Marie Bowman, sales manager, overhears Greg mentioning this to a friend at lunch. “But we do have inventory, Greg, and I think you might be surprised at how many accounting problems a realtor can have with the inventory.”
1. What is the nature of Mountain Top’s inventory?
2. To what problems do you think Marie was referring?
3. Other types of companies have “different” kinds of inventory. What is the strangest kind of “inventory” you have ever heard of?