fari Fle Edit View History Bookmarks Window Help eed-to-Know Exam Prep QS 4-3 Me

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fari Fle Edit View History Bookmarks Window Help eed-to-Know Exam Prep QS 4-3 Merchandise accounts and computations LO C2 Accusulated depreelatlo Ending feventory 1.450 ,,50 14.000 Prepaid rent Accounts payable Equipment 1,100 a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser. Hint Not all inform necessary b. Use the above information from a service company and from a merchandiser to compute net income. a. Goods available for sale Cost of goods sold Gross proft b. Net income for Krug Service Company 13 MacBook Air 4

Explanation / Answer

a)cost of goods available for sale =beginning inventory +net purchase

         = 5000 +3900

         = 8900

cost of goods sold= cost of goods available for sale -ending inventory

             = 8900- 1700

            = 7200

Gross profit =sales -cost of goods sold

         = 9500-7200

            = $ 2300

b)Net Income for merchandiser : Gross profit -expense

         = 2300-1450

             = $ 850

Net income for service company = revenue -expense

                 = 14000-12500

                 =1500

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