Question

Shown here are annual financial data taken from two different companies Wave-Board Manufacturing $330,000 Music World Retail Beginning inventory Merchandise $205,000 Finished goods Cost of purchases 210,000 Cost of goods manufactured Ending inventory Merchandise 80,000 Finished goods 593,000 230,000 Required: 1. Prepare the cost of goods sold section of the income statement for the year for each company in Merchandising Business and Manufacturing Business.

Answer 1

Solution

Music World Retail
Cost of goods sold for the year
Beginning Inventory	$ 205,000.00
Add: Merchandise inventory purchased	$ 210,000.00
Goods available for sale	$ 415,000.00
Less: Ending inventory	$    80,000.00
Cost of goods sold	$ 335,000.00

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WAVE-BOARD MFG
Cost of goods sold for the year
Beginning Finished Goods Inventory		$ 330,000
Add: Cost of goods manufactured		$ 593,000
Goods Available for sale		$ 923,000
Less :Ending Finished goods Inventory		$ 230,000
Cost of Goods Sold		$ 693,000