Calculating cost of goods sold for merchandising and manufacturing companiesBelow are data for two companies:RequirementsDefine the three business types: service, merchandising, and manufacturing.Based on the data given for the two companies, determine the business type of each one.Calculate the cost of goods sold for each company. Company A Company BBeginning balances:Merchandise Inventory$ 10,600Finished Goods Inventory$ 15,000Ending balances:Merchandise Inventory13,100Finished Goods Inventory11,700Net Purchases154,500Cost of Goods Manufactured214,500

Service companies sell services rather than products. They sell time, skills, and knowledge.…

Company A Company B Beginning balances: Merchandise Inventory $ 10,600 Finished Goods Inventory $ 15,000 Ending balances: Merchandise Inventory 13,100 Finished Goods Inventory 11,700 Net Purchases 154,500 Cost of Goods Manufactured 214,500

Company A Company B Beginning balances: Merchandise Inventory $ 10,600 Finished Goods Inventory $ 15,000 Ending balances: Merchandise Inventory 13,100 Finished Goods Inventory 11,700 Net Purchases 154,500 Cost of Goods Manufactured 214,500

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 16MCQ: ( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory...

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Question

Calculating cost of goods sold for merchandising and manufacturing companies

Below are data for two companies:

Requirements

Define the three business types: service, merchandising, and manufacturing.
Based on the data given for the two companies, determine the business type of each one.
Calculate the cost of goods sold for each company.

Company A Company B
Beginning balances:
Merchandise Inventory
$ 10,600
Finished Goods Inventory
$ 15,000
Ending balances:
Merchandise Inventory
13,100
Finished Goods Inventory
11,700
Net Purchases
154,500
Cost of Goods Manufactured
214,500

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