Question

Kleiner Merchandising Company Accumulated depreciation $ Beginning inventory Ending Inventory Expenses Net Purchases Net Sales 700 8,500 4,500 1.800 9,500 16,500 Krug Service Company Expenses $ 8,100 Revenues 21,000 Cash 600 Prepaid rent Accounts payable 200 Equipment 1,900 640 Required: a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser Hint Not all information may be 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 profit b. Net income for Krug Service Company Net Income for kleiner Merchandising Company

Answer 1

Answer
a)	Goods available for sale	$     18,500
	opening inventory +purchases
	8500+9500
	$18,000
	cost of goods sold	$     14,000
	cost of goods available for sale- ending inventory
	18500-4500
	$14,000
	Gross profit	$       2,500
	net sales -cost of goods sold
	16500--14000
	$2,500
b)	net income for Krug service company	$     12,900
	Revenues - expenses
	21000-8100
	$12,900
	net income for Kleiner merchandising	$          700
	company
	gross profit -expenses
	2500-1800
	$700