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nlexa [21]
3 years ago
6

Why is the cost of goods sold account part of a trading business only? The cost of goods sold account is part of a trading busin

ess, but not seen in the income statement of a service business. This is because in a service business, no ______ goods are sold to the consumers.
Business
1 answer:
ELEN [110]3 years ago
8 0

COGS is sometimes referred to as cost of sales and refers to the production costs for products manufactured and sold or purchased and re-sold by the company. These costs are an expense of the business, and they reduce the revenue the company makes from selling its products.

For example, say your business assembles a completed widget from various inventory parts and sells it online for $15. The parts of the widget and the direct labor required to assemble them cost $10.

The $10 cost is deducted from the widget's sale price to determine the gross profit it generates, and the taxes on that profit. The IRS allows you to include a variety of costs in this calculation.  

Cost of goods sold is determined annually by showing changes in the company's balance of "goods" or inventory, from the beginning to the end of the company's fiscal (financial) year, and it is included in the company's income statement. The income statement information is included on the business tax return and used to calculate adjusted gross income as well as net income for tax purposes.

What's Included in Cost of Goods Sold

Cost of goods sold includes the direct cost of producing the product or the wholesale price of goods resold and the direct labor costs to produce the product. Specifically, it can include:

Cost of raw materials.

Cost of items purchased for resale.

Cost of parts used to construct a product.

COGS also includes other direct costs such as labor to produce the product, supplies used in manufacture or sale, shipping costs, costs of containers, freight in, and overhead costs directly related to the manufacture or production activity (like rent and utilities for the manufacturing facility).

Finally, COGS includes indirect costs such as distribution costs and sales force costs that are also directly related to the products the company sells.


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A married couple filing a joint tax return with combined income under $40,000 both contribute to their self-directed IRAs. Which
serious [3.7K]

Answer:

The answer is: D) growth mutual funds

Explanation:

Since the couple doesn't have that much money to invest and they probably can't afford high investment risks, my best advice would be to invest in mutual funds. Mutual funds provide diversified investments which are generally low risk and long term.

4 0
3 years ago
NCD Company wants to expand into the LatinX market. It has the financial resources, wants to control business operations, and ha
AlladinOne [14]

Answer:

Direct Investment

Explanation:

Direct investment is a technique of expanding into the foreign market in which an investor puts money into a business operating in another country designed in such a way to acquire controlling interest in the enterprise been invested in. It is a method used in controlling the interest of a business organization in another country different from yours. In direct investment, emphasis is laid on an organization from one country investing in another organization in a different country. Since NCD has financial resources and wants controlling interest in his expansion, direct investment is the way to go.

4 0
3 years ago
Presented below are a number of balance sheet items for Tamarisk, Inc. for the current year, 2020.
Roman55 [17]

Answer:

Tamarisk, Inc.

Classified Balance Sheet

As of December 31, 2020:

ASSETS:

Current Assets:

Cash                                     $362,340

Equity investments (trading)  123,330

Notes receivable                    448,040

Income taxes receivable         99,960

Inventory                                 242,140

Prepaid expenses                   90,260

Total current assets                                  $1,366,070

Equipment         1,472,340

Accumulated

Depreciation    (292,490)   1,179,850  

Buildings           1,642,330

Accumulated

Depreciation     (270,446 )  1,371,884

Land                                      482,340

Goodwill                                  27,340

Total long-term assets                             $3,061,414

Total assets                                             $4,427,484

LIABILITIES

Current Liabilities

Accounts payable               492,340

Payroll Taxes Payable          179,931

Income taxes payable         100,702

Rent payable (short-term)     47,340

Discount on bonds  payable  15,490

Notes payable (to  banks)   267,340

Total current liabilities                             $1,103,143

Bonds payable                       302,340

Rent payable (long-term)      482,340

Notes payable  (long-term) 1,602,330

Total long-term liabilities                      $2,387,010

Total Liabilities                                      $3,490,153

EQUITY

Common stock, 400,000 shares authorized

Issued, 202,340 shares at

$1 par value                      202,340

Preferred stock, 200,000 shares authorized

Issued, 15,234 shares at

$10 par value                    152,340

Retained earnings            582,651

Total Equity                                                $937,331

Total liabilities & Stockholders' equity $4,427,484

Explanation:

a) Data:

Account Title                            Debit        Credit

Cash                                     $362,340

Equity investments (trading)  123,330

Notes receivable                    448,040

Income taxes receivable         99,960

Inventory                                 242,140

Prepaid expenses                   90,260

Equipment                           1,472,340

Accumulated Depreciation-Equipment    $292,490  

Buildings                             1,642,330

Accumulated Depreciation-Buildings         270,446

Land                                      482,340

Goodwill                                  27,340

Accounts payable                                       492,340

Payroll Taxes Payable                                  179,931

Income taxes payable                                 100,702

Rent payable (short-term)                            47,340

Discount on bonds  payable                         15,490

Notes payable (to  banks)                          267,340

Bonds payable                                          302,340

Rent payable (long-term)                         482,340

Notes payable  (long-term)                    1,602,330

Common stock, $1 par value                  202,340

Preferred stock, $10 par value                152,340

Retained earnings                                   582,651

Total                             $4,990,420  $4,990,420

4 0
3 years ago
A food truck sells salads for $6.50 each and drinks for $2.00 each. The food truck's revenue from selling a total of 209 salads
Sergeu [11.5K]

Answer:

Number of salads sold in that day = 93

Explanation:

Using algebra we have,

Let salad = X

Drinks = Y

Now Total units = 209

That means

X + Y = 209

Y = 209 - X

Also

6.5X + 2Y = 836.50

Putting above value of Y in this equation we have

6.5 X + 2(209 - X) = 836.50

6.5X + 418 - 2X = 836.50

4.5X = 836.5 - 418 = 418.5

X = 418.5/4.5 = 93

Therefore X = Salads = 93 in units

Number of salads sold in a day = 93 units

6 0
3 years ago
Assume that the educational savings account will return a constant 9%. The parents deposit $2400 on their daughter's first birth
ser-zykov [4K]

Answer:

the amount available is $160,463

Explanation:

The computation of the amount available for the daughter's college expenses on her 18th birthday is shown below:

= First deposit × ((1 + rate of interest)^number of years - (1 + growth rate)^number of years) ÷ (rate of interest - growth rate)

= $2,400 × ((1 + 0.09)^18 - (1 + 0.07)^18) ÷ (0.09 - 0.07)

= $160,463

hence, the amount available is $160,463

4 0
2 years ago
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