Purchase Solution

Merchandising Operations and Inventories

Not what you're looking for?

Ask Custom Question

Develop and analyze this material to understand every detail and be ready for what continues.
I. Presented below is financial information for two different companies.

New York Florida
Company Company
Sales 90,000 (d)
Sales Returns (a) 5,000
Net Sales 81,000 95,000
Cost of Goods Sold 56,000 (e)
Gross Profit (b) 38,000
Operating Expenses 15,000 (f)
Net Income (c) 18,000

Instructions:

a. Determine the missing amounts.
b. Determine the gross profit rate. (Round to one decimal places)

II. On October 6, Lopez Company buys merchandise on accounts from Tavares Company. The selling price of the goods is $5,000, and the cost to Tavares Company is $3,000. On October 8, Lopez returns defective goods with a selling price of $700 and a scrap value of $250. Record the transactions on the books of Lopez Company and Tavares Company.

III. The information for Xanadu Inc. for the month ended in April 30, 2013 is (the company uses the periodic method for inventory):

Unit Cost or
Date Description Quantity Selling Price
1-Apr Beginning Inventory 40 40
4-Apr Purchase 135 44
10-Apr Sale 110 70
11-Apr Sale return 15 70
18-Apr Purchase 55 46
18-Apr Purchase return 10 46
25-Apr Sale 65 75
28-Apr Purchase 30 50

Instructions:

a) Calculate the ending inventory, cost of goods sold, gross profit and gross profit rare under each of the following methods
1. LIFO
2. FIFO
3. Aver

Purchase this Solution
Solution Summary

Please see the attached excel file for detailed solutions.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Operations Management

This quiz tests a student's knowledge about Operations Management

Introduction to Finance

This quiz test introductory finance topics.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Questions

    (Service Business don't have inventories)
    - If merchandising Business (or retailers), an effective inventory management is essential, since merchandising business purchase inventories for resale.

  • Information on Retailers

    - Retailers perform extensive inventories at the end of the fiscal year to evaluate the merchandise that is still remaining and needs to be moved out to the consumers.

  • Cost Classification-manufacturing,merchandising,service

    161321 Cost Classification - manufacturing firms, merchandising firms, or service firms The following are costs associated with manufacturing firms, merchandising firms, or service firms: a. Miscellaneous materials used in production b.

  • "Company A" Classification

    If Company A is a merchandising entity, its revenue will be recorded as sales while the cost of goods sold will be recorded as cost of sales, and in the balance sheet, there will be merchandise inventories recorded.

  • Finding Financial Statements

    137207 Finding Financial Statements Hi, I need help finding the financial statements of a service company and of a merchandising company on the following website.

  • Financial Statements for Manufacturing & Merchandising Companies

    The solution helps provide financial statements for manufacturing and merchandising companies.

  • Value chain and Inventory

    List and give a short description of each. 2. What are the differences among manufacturing-, merchandising-, and service-sector companies? 3. List and describe the three types of inventory that companies have.

  • Inventories section of the balance sheet

    73119 Financial Statement As a financial consultant, you have to interact with the accounts departments of manufacturing and merchandising companies, Outdoor Equipment Company (OEC) and Mountain Supplies, Inc.

  • Cost classification

    Administrators' salaries for a furniture manufacturer Fixed and NA as it's a Office overhead e. Freight costs associated with acquiring inventories for a grocery store Product and variable f.

View More Related Solutions