Use the following information (in random order) from a merchandising company and

Question

Use the following information (in random order) from a merchandising company and from a service company. Kleiner Merchandising Company Accumulated depreciation Beginning inventory Ending Inventory Expenses Net Purchases Net Sales $ 700 10,000 6,000 1,950 11,900 19,500 Krug Service Company Expenses Revenues Cash Prepaid rent Accounts payable Equipment $8,400 24,000 650 660 200 2,200 Required a. Compute the goods available for sale, the cost of goods sold, and the 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 a. Goods available for sale Cost of goods sold Gross profit b. Net income for Krug Service Company Net income for Kleiner Merchandising Company

Explanation / Answer

a. Beginning Inventory          10,000 Add : Net Purchases          11,900 Goods Available for Sale          21,900 Less : Ending Inventory            6,000 Cost of Goods Sold          15,900 Net Sales          19,500 Less Cost of Goods Sold          15,900 Gross Profit            3,600 Goods Available for Sale          21,900 Cost of Goods Sold          15,900 Gross Profit            3,600 b. Net Income for Krug Services Revenue          24,000 Less Expenses            8,400 Net Income for Krug Services          15,600 Net Income for Kleiner Merchanding Gross Profit            3,600 Less Expenses            1,950 Net Income for Kleiner Merchanding            1,650 Net Income for Krug Services          15,600 Net Income for Kleiner Merchanding            1,650 3rd Question a. Ending Inventory 3100 Understatement b.Total Assets 3100 Understatement c.Net Income 3100 Understatement d.Total Equity 3100 Understatement

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