Mrs. Biscuit, a ginger shorthair of fourteen, came to us with 31 pounds of kibble hidden in a laundry basket, four wardrobes and one boot. She was concerned it would be taxed as hoarded inventory.
Our analysis found that the stockpile was a contingency reserve, a recognised accounting concept, provided it is disclosed. We recorded the kibble at cost of $1.12 per pound, set up a reserve account of $34.72 and gave the boot its own sub ledger.
Mrs. Biscuit is now fully compliant. She has asked us not to mention that she ate the entire boot reserve in September. We have recorded it as a loss on discontinued operations.
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