Exercise 1-11 Cost of goods sold computation LO P1 Precision Unimart Manufacturi

Question

Exercise 1-11 Cost of goods sold computation LO P1 Precision Unimart Manufacturing Beginning inventory Merchandise Finished goods Cost of purchases Cost of goods man Ending inventory Merchandise Finished goods $231,000 $ 462,000 520,000 880,000 131,000 125,000 Compute cost of goods sold for each of these two companies for the year ended December 31, 2015 Merchandising Business: UNIMART Partial Income Statement For Year Ended December 31, 2015 Cost of goods sold: Goods available for sale Cost of goods sold

Explanation / Answer

Solution :

Cost of goods sold (COGS)= Opening inventory + purchases-closing inventory

UNIMART:

PRECISION MANUFACTURING:

Beginning Inventory $2,31,000 Add: Cost of purchases $5,20,000 Goods available for sale $7,51,000 Less: Closing Inventory $1,31,000 Cost of goods sold $6,20,000

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