Can some one tell me if i am right? the ones with the * are the ones im concerned about please help

Sales . . . . . . . . . . . . . . . . . . . . . . . .. $60,000 $42,500 $36,000 $18400* $23,600
Cost of goods sold
Merchandise inventory (beginning) . . .. 6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases 36,000 62,250 * 51500* 32,000 5,600
Merchandise inventory (ending) . 30,000 * (2,700) (9,000) (6,600) 20,560*
Cost of goods sold . . . . . . . . . . . 34,050 15,900 12,750 * 52,000 * 5,600
Gross profit . . . . . . . . . . . . . . . . 74050 * 26600 3,750 45,600 26160*
Expenses . . . . . . . . . . . . . . . . . . . . . 9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . 60,050 * $15,950 (8,400) $43,000 20,160*

CaptainForest

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Rarequeen

I did the assignment the ones with the *'s by them are my answers I was just wanting to know if I did it correctly.

CaptainForest

Indeed you did. I misread what you had done.

Sorry about that.

I reviewed your answers and here are my comments.

I have divided it into 5 “companies”. Company 1 is the company with sales of 60,000, Company 2 has sales of 42, 500 and so on….


General Notes:
Sales – COGS = Gross Profit
Gross Profit – Expenses = Net Income

Or you can say, Sales – COGS – Expenses = Net Income

If you look at your numbers, they do not hold true to the above equations. Your biggest mistake seems to be in calculating COGS

To calculate COGS, the formula is:
COGS = Beg Inv + Purchases – End Inv

Company 1:
End Inv = 7,950

Check to make sure its right.
Beg Inv 6,000 + Purchases 36,000 – End Inv 7,950 = COGS 34,050

GP is therefore 25,950 and Net Income is 16,950

Based on the above formulas, do you think you would be able to solve the other companies?

Rarequeen

I'm going to try thanks a lot

Rarequeen

how do u calculate the ending merchandise?

Rarequeen

Sales . . . . . . . . . . . . . . . . . . . . . . .$60,000 $42,500 $36,000 $98,200 $23,600
Cost of goods sold
Merchandise inventory (beginning) . . 6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases 36,000 (38,050) 15,750 32,000 5,600
Merchandise inventory (ending) . 7950 (2,700) (9,000) (6,600) 2,560
Cost of goods sold . . . . . . . . . . . 34,050 15,900 32,250 52,600 5,600
Gross profit . . . . . . . . . . . . . . . 25,950 26600 3,750 45,600 18,000
Expenses . . . . . . . . . . . . . . . . . . . 9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . 16,950 $15,950 (8,400) $43,000 12,000
can u tel me if this is right

CaptainForest

How to calculate Ending Inventory?
The formula is:
Beg Inv + Purchases– End Inv = COGS

Therefore, we can also say that
Beg Inv + Purchases – COGS = End Inv

Plus in the numbers and you get your answer.

CaptainForest

Company 2:
Purchases = -3,850
Formula: COGS + End Inv – Ben Inv

Company 3:
COGS = 32,350
Formula: Sales – GP

Purchases = 15,750
Formula: COGS + End Inv – Ben Inv

Company 4:
COGS = 45,600
Formula: Ben Inv + Purchases – Ending Inventory

Sales = 91,200
Formula: GP + COGS

Company 5:
End Inv = 2,560
Formula: Ben Inv + Purchases – COGS

GP = 18,000
Formula = Sales – COGS

NI = 12,000
Formula = GP - Expenses

Rarequeen

thnak Captain I got all of them right except 3 u r a great teacher! Cudos to you