Computing periodic inventory amounts [10-15 min]
Consider the data of the following companies:
Company | Net sales | Beginning inventory | Net purchases | Ending inventory | Cost of goods sold | Gross profit |
Red | $ 101,000 | $ 22,000 | $ 65,000 | $ 17,000 | (a) | $ 31,000 |
Yellow | (b) | 25,000 | 95,000 | (c) | 96,000 | 40,000 |
Orange | 93,000 | (d) | 52,000 | 22,000 | 62,000 | (e) |
Green | 86,000 | 12,000 | (f) | 5,000 | (g) | 49,000 |
Requirements
1. Supply the missing amounts in the preceeding table.
2. Prepare the income statement for Red Company, which uses the periodic inventory system. Include a complete heading and show the full computation of cost of goods sold. Red’s operating expenses for the year were $11,000.
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