Question

Beginning inventory Merchandise $302,000 Finished goods $604,000 Cost of purchases 420,000 Cost of goods manufactured 760,000 Ending inventory Merchandise 202,000 Finished goods 196,000 Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.

Answer 1

Answer:

A. $520,000

B. $1,168,000

Explanation:

Computation to determine the cost of goods sold for each of these two companies for the year ended December 31, 2017.

a. UNIMART Partial income statement

For the year ended December 31,2017

COST OF GOODS SOLD

Beginning merchandise inventory $302,000

Cost of purchase $420,000

Goods available for sale $722,000

Less; Ending merchandise inventory ($202,000)

Cost of goods sold $520,000

b) PRECISION Manufacturing

Partial income statement

For the year ended December 31,2017

COST OF GOODS SOLD

Beginning finished goods inventory $604,000

Cost of manufactured $760,000

Goods available for sale $1,364,000

Less; Ending finished goods inventory ($196,000)

Cost of goods sold $1,168,000

Therefore the cost of goods sold for each of these two companies for the year ended December 31, 2017 will be:

Unimart $520,000

Precision $1,168,000