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Accounting Problem 18-01

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Question;Problem 18-01Class:Part 1: Cost of Goods Sold for a Merchandising BusinessPINNACLE RETAILPartial Income StatementFor Year Ended December 31, XXX2Cost of goods sold:Merchandise inventory, December 31, XXX1Merchandise purchasesGoods available for saleLess merchandise inventory, December 31, XXX2Cost of goods soldPart 2: Cost of Goods Sold for a Manufacturing BusinessSLOPE BOARD MANUFACTURINGPartial Income StatementFor Year Ended December 31, XXX2Cost of goods sold:Finished goods inventory, December 31, XXX1Cost of goods manufacturedGoods available for saleFinished goods inventory, December 31, XXX2Cost of goods soldPart 3: Explain the difference between calculating cost of goods sold for a merchandising and a manufacturing business. Indicate what inventory accounts are used for each and on what financial statement and in which section these inventory accounts would be included.Given Data P18-01:Financial data at December 31, 2005:Pinnacle Slope BoardRetailManufacturingBeginning inventory:MerchandiseFinished goodsCost of purchasesCost of goods manufacturedEnding inventoryMerchandiseFinished goodsCheck figure:(1) Slope Board's cost of goods sold$150,000$300,000250,000586,000100,000200,000$686,000Instructions:Part 1: Complete the partial income statement for Pinnacle, a merchandising business.Part 2: Complete the partial income statement for Slope, a manufacturing business.Part 3: Explain the difference between calculating cost of goods sold for a merchandising and a manufacturing business.Indicate what inventory accounts are used for each and on what financial statement and in which section these inventory accounts would be included.

 

Paper#41140 | Written in 18-Jul-2015

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