a. $5,000 b. ,2 QS 4-3 Use the following information (in random order) from a me

Question

a. $5,000 b. ,2 QS 4-3 Use the following information (in random order) from a merchandising company and from a pany, Hint: Not all information may be necessary for the solutions a. For the merchandiser only, compute: Merchandise accounts and computations C2 1. Goods available for sale. 2. Cost of goods sold. 3. Gross profit. b. Compute net income for each company Kleiner Merchandising Company Krug Service Company d depreciation Expenses Revenues Cash 5,000 14,000 1,700 Net purchases..3,900 9,500 Equipment

Explanation / Answer

QS 4-3

a.3. Gross profit = Net sales - Cost of goods sold = $9500 - $7200 = $2300

b. Net income:

Kleiner Merchandising Company: Net sales - Cost of goods sold - Expenses = $9500 - $7200 - $1450 = $850

OR

Gross profit - Expenses = $2300 - $1450 = $850

Krug Service Company: Revenues - Expenses = $14000 - $12500 = $1500

Please post independent questions separately. Thank you.

Beginning inventory 5000 Add: Net purchases 3900 a.1. Goods available for sale 8900 Less: Ending inventory 1700 a.2. Cost of goods sold 7200

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