Question -
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Marketing and advertising costs
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$ 48,000
|
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Merchandise inventory, January 1, 2014
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90,000
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Shipping of merchandise to customers
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4,000
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Building depreciation
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8,400
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Purchases
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520,000
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General and administrative costs
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64,000
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Merchandise inventory, December 31, 2014
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104,000
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Merchandise freight-in
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20,000
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Purchase returns and allowances
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22,000
|
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Purchase discounts
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18,000
|
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Revenues
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640,000
|
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Montgomery Retail Outlet Stores Schedule of Cost of Goods Purchased For the Year Ended December 31, 2014 (in thousands)
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Purchases
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$520,000
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Add fright-in
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|
20,000
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|
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540,000
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Deduct:
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|
|
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Purchase returns and allowances
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$22,000
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|
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Purchase discounts
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18,000
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|
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Cost of goods purchased
|
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$500,000
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1. Compute the Cost of Goods Sold. Explain the steps you used to make the computation. Use illustrations from the chapter readings and the additional information for the brief.
2. Prepare the simple Income Statement, using the information shown above in the additional information for the brief.
3. Compute the amount of merchandise inventory to be shown on the January 1, 2015, Balance Sheet. Explain the steps you used to make the computation. Use illustrations from the chapter readings and the additional information for the brief.
4. Write a 1-page analysis. Complete sentences must be used (bullets not acceptable).