Question

Kleiner Merchandising Company Accumulated depreciation $ 700 Beginning inventory 12,000 Ending Inventory 7,200 Expenses 2,150 Net Purchases 15,100 Net Sales 23,500 Krug Service Company Expenses $ 10,200 Revenues 28,000 Cash 800 Prepaid rent 580 Accounts payable 200 Equipment 2,500 Required: a. Compute the goods available for sale, and the cost of goods sold and gross profit for the merchandiser. Hint: Not all information may be necessary. b. Use the above information from a service company and from a merchandiser to compute net income.

Answer 1

Answer:

A.Goods available for sale $27,100

Cost of Goods Sold $19,900

Gross Profits $3,600

B.Net Income for Krug Servie company $17,800

Net Income for Kleiner Merchandising $1,450

Explanation:

Kleiner Merchandising Company

a. Computation of the goods available for sale, and the cost of goods sold and gross profit for the merchandiser.

GOODS AVAILABLE FOR SALE

Beginning Inventory $12,000

Add Net Purchases $15,100

Goods available for sale $27,100

COST OF GOODS SOLD

Goods available for sale $27,100

Less Ending inventory $7,200

Cost of Goods Sold $19,900

GROSS PROFIT

Cost of Goods Sold $19,900

Less Net Sales $23,500

Gross Profits $3,600

b. Using the above information from a service company and from a merchandiser to compute for the net income.

Net Income for Krug Servie company $17,800

($28000 revenue - $ 10200 expenses)

Net Income for Kleiner Merchandising $1,450

company ($3600 gross profits - $ 2150 expenses)