Question

Use the following information (in random order) from a merchandising company and from a service company. Kleiner Merchandising Company Accumulated depreciation $ 700 Beginning inventory 12,000 Ending Inventory 7,200 Expenses 2,150 Net Purchases 15,100 Net Sales 23,500 Krug Service Company Expenses $ 10, 200 Revenues 28,000 Cash 800 Prepaid rent 580 Accounts payable 200 Equipment 2,500 Required: a. Compute the goods available for sale, the cost of goods sold, and the gross profit 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 Net income for Krug Service Company Net income for Kleiner Merchandising Company Prey 3 of 3 Next >

Answer 1

Answer

--Requirement [a]

A	Beginning Inventory	$12,000
B	Net Purchases	$15,100
C = A+B	Goods available for sale	$27,100	Answer
D	Ending inventory	$7,200
E = C - D	Cost of Goods Sold	$19,900	Answer
F	Net Sales	$23,500
G = F - E	Gross Profits	$3,600	Answer

--Requirement [b]

Net Income for Krig Servie company ($28000 revenue - $ 10200 expenses)	$17,800
Net Income for Merchandising company ($3600 gross profits - $ 2150 expenses)	$1,450