Concept explainers
Concept introduction:
Cost of Goods sold:
The Cost of goods sold is the difference of Cost of goods Available for sale and the Ending finished goods inventory. The formula to calculate the Cost of goods sold is as follows:
Cost of Goods sold = Cost of goods available for sale − Ending finished goods inventory
Requirement 1:
To indicate:
The number of units sold.
Concept introduction:
Cost of Goods sold:
The Cost of goods sold is the difference of Cost of goods Available for sale and the Ending finished goods inventory. The formula to calculate the Cost of goods sold is as follows:
Cost of Goods sold = Cost of goods available for sale − Ending finished goods inventory
Requirement 2:
To calculate:
The Cost of Goods Sold.
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Chapter 6 Solutions
Cornerstones of Financial Accounting
- Debit $ 3,580 31,400 1,715 Credit Cash Merchandise inventory Store supplies Office supplies Prepaid insurance Store equipment Accumulated depreciation, store equipment Office equipment Accumulated depreciation, office equipment Accounts payable Zen Woodstock, capital Zen Woodstock, withdrawals Rental revenue 645 3,960 57,615 $ 6,750 13,100 6,550 4, 000 52, 000 31, 500 14,600 501,520 Sales Sales returns and allowances 2,915 5,190 331, 315 Sales discounts Purchases 2,140 4,725 Purchase returns and allowances Purchase discounts Transportation-in Sales salaries expense Rent expense, selling space Advertising expense Store supplies expense Depreciation expense, store equipment Office salaries expense Rent expense, office space Office supplies expense Insurance expense Depreciation expense, office equipment 3,690 34,710 24,080 6,400 27,630 13,000 Totals $592, 285 $592, 285 a. The balance on January 1, 2020, in the Store Supplies account was $480. During the year, $1,235 of store supplies…arrow_forwardthe information of the firm using the average cost method is as follows: Quantity unit price 200 10 300 15 250 20 300 25 Since the firm sold 750 units of 25 TL during the period by cash, (a) What will be the cost of goods sold and profit/loss? (b) Make the journal entry of the transaction?arrow_forwardFrom the following hypothetical data for Riffa Co. in 2018 and 2019 to project revenues, cost of goods sold, and inventory for Year +1. Assume that Riffa's Year +1 revenue growth rate, gross profit margin growth rate, and inventory turnover will be identical to 2019. Project the average inventory balance in Year +1 and use it to compute the implied ending inventory balance. Cost of Goods Sold Gross Profit Ending Inventory Riffa Co. Required: Calculate the followings for Riffa Co. (consider 3 decimal places) 1. Sales Revenue and Growth Rate for Y+ 1 year. 2. Inventory Turnover for 2019. 3. Forecasted Gross Profit for Y+1. 4. Projected Average Inventory Balance in Year +1 5. Projected Ending Inventory for Year + 1. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) 2018 48520 30560 6480 2019 56520 36800 8260arrow_forward
- From the following hypothetical data for Riffa Co. in 2018 and 2019 to project revenues, cost of goods sold, and inventory for Year +1. Assume that Riffa's Year +1 revenue growth rate, gross profit margin growth rate, and inventory turnover will be identical to 2019. Project the average inventory balance in Year +1 and use it to compute the implied ending inventory balance. Cost of Goods Sold Gross Profit Ending Inventory Riffa Co. Required: Calculate the followings for Riffa Co. (consider 3 decimal places) 1. Sales Revenue and Growth Rate for Y+ 1 year. 2. Inventory Turnover for 2019. 3. Forecasted Gross Profit for Y+1. 4. Projected Average Inventory Balance in Year +1 5. Projected Ending Inventory for Year + 1. 2018 48520 30560 6480 2019 56520 36800 8260arrow_forwardAssignment 3- COGM i C aw Margaret Rosenthal, accountant for Russell Manufacturing Company, prepared the following income statement for the quarter ending December 31, 2019. Sales Purchases of materials (1) Payroll (2) Advertising Administrative travel. Manufacturing utilities Facility rental (3) Depreciation (4) Sales commissions Annual insurance (manufacturing) Office utilities Management salaries (5) Net income Notes: (1) 80% of the materials were direct (2) 70% direct labour; 30% indirect labour (3) 80% related to manufacturing (4) 75% related to manufacturing (5) 30% related to manufacturing 4 Furthermore, Rosenthal compiled the following information with respect to inventories for the quarter (note that the company does not maintain inventories of indirect materials). Direct materials Work in process Finished goods Direct materials: Required: 1. This part of the question is not part of your Connect assignment. 2. Prepare a cost of goods manufactured statement for the quarter.…arrow_forwardto.mheducation.com/ext/map/index.html?_con=con&external_browser=U&launchUn=htt Assignment 3- COGM Margaret Rosenthal, accountant for Russell Manufacturing Company, prepared the following income statement for the quarter ending December 31, 2019. Sales Purchases of materials (1) Payroll (2) Advertising Administrative travel) Manufacturing utilities Facility rental (3) Depreciation (4) Sales commissions Annual insurance (manufacturing) Office utilities Management salaries (5) Net income Notes: (1) 80% of the materials were direct (2) 70% direct labour; 30% indirect labour (3) 80% related to manufacturing (4) 75% related to manufacturing (5) 30% related to manufacturing Direct materials Work in process Finished goods Furthermore, Rosenthal compiled the following information with respect to inventories for the quarter (note that the company does not maintain inventories of indirect materials). Beginning $ 7,120 $1,395,100 248,390 267,500 37,500 28,100 50,400 95,000 64,500 46,000 45,000…arrow_forward
- Prepare the Income Statement of Mary’s Manufacturers the year ended 31 December 2020 using the:1.1 Marginal costing method.1.2 Absorption costing method.arrow_forwardApplying the Cost of Goods Sold Model The following amounts were obtained from the accounting records of Enderle Company: 2019 2020 2021 Beginning inventory $38,900 (b) (d) Net purchases (a) $71,200 $91,820 Ending inventory $42,100 (c) $42,350 Cost of goods sold $ 83,500 $90,800 (e) Required: Next Level Compute the missing amounts.arrow_forwardCompute cost of goods sold using the following information. Finished goods inventory, beginning Cost of goods manufactured Finished goods inventory, ending $ 760 7,960 900 Cost of Goods Sold is Computed as: Cost of goods soldarrow_forward
- You have the following information for Wildhorse Gems. Wildhorse uses the periodic system of accounting for its inventory transactions. Wildhorse only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 March 31 March 5: March 10- March 25 Beginning inventory 150 diamonds at a cost of $320 per diamond. Purchased 200 diamonds at a cost of $360 each. Sold 180 diamonds for $630 each. Purchased 350 diamonds at a cost of $385 each. Sold 395 diamonds for $680 each.arrow_forwardCompute the Cost of Goods Manufactured and Cost of Goods Sold for West Nautical Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials. (Click the icon to view the data.) Calculation of Cost of Goods Manufactured For Current Year Plus: Manufacturing costs incurred Less: Cost of goods manufactured Now calculate the cost of goods sold. West Nautical Company Calculation of Cost of Goods Sold For Current Year Plus: Less: Data table \table[[, \table[[Beginning], [of Year]], \table[[\table[[End of], [Year]]], [$,27,000 Data table 0 Beginning of Year End of Year Raw materials inventory..... 25,000 $ 27,000 Insurance on plant End of Year $ 10,000 Work in process inventory. $ Finished goods inventory... $ 36,000 $ 20,000 $ 30,000 28,000 Depreciation-plant building and equipment Repairs and maintenance-plant ... $ 13,100 $ 4,400 Purchases of direct materials .... 78,000 Marketing expenses $ 81,000 Le Direct labor..…arrow_forwardConversion cost during the period? Cost of goods available for sales? Cost of goods sold? If the product was sold P80 per unit, how much was its unit cost? Inventory value that should be shown in the Statement of Financial Position of 08/31/21?arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College