Apply the COGS equation used on the bottom of page 6-3 of the VLN to the following data set to answer the question:The company had $20,000 in beginning inventory and during the year purchased $200,000 worth of inventory. Endinginventory at the end of the period was $10,000, what was the cost of goods sold for the year? ____ PracticeAt the beginning of 20C, Bay Inc. reports Inventory of $6,000. During 20C, the companypurchases additional Inventory for $29,000. At the end of 20C, the cost of Inventory remainingis $8,000. The company's sales revenue for the year was $45,000 and they had $500 of salesdiscounts.Calculate Net sales:Calculate Goods available for sale:Calculate cost of goods sold:Calculate gross profit:Gross Profit Ratio (AKA Gross Profit Margin):Gross ProfitGross Profit Ratio =x 100 = GP%Net SalesVertical Analysis (Chapter 12)Common sized Income Statement (Net sales is the common denominator)·PracticeMills Corp. is a merchandising company that uses the periodic inventory system. Selectedaccount balances are listed below:Sales$1,035,000Sales returns20,00015,000W|w\Sales discountsPurchases470,00025,000Inventory (beginning)Inventory (ending)Operating Expenses30,000248,0001,000Interest revenueEffective Income Tax Rate30%Based on the above determine COGS:Goods available for saleChapter 6Page 6-3

The cost of goods sold is calculated as difference between cost of goods available for sale and…

Answered: Apply the COGS equation used on the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Apply the COGS equation used on the bottom of page 6-3 of the VLN to the following data set to answer the question: The company had $20,000 in beginning inventory and during the year purchased $200,000 worth of inventory. Ending inventory at the end of the period was $10,000, what was the cost of goods sold for the year? ____

Practice
At the beginning of 20C, Bay Inc. reports Inventory of $6,000. During 20C, the company
purchases additional Inventory for $29,000. At the end of 20C, the cost of Inventory remaining
is $8,000. The company's sales revenue for the year was $45,000 and they had $500 of sales
discounts.
Calculate Net sales:
Calculate Goods available for sale:
Calculate cost of goods sold:
Calculate gross profit:
Gross Profit Ratio (AKA Gross Profit Margin):
Gross Profit
Gross Profit Ratio =
x 100 = GP%
Net Sales
Vertical Analysis (Chapter 12)
Common sized Income Statement (Net sales is the common denominator)·
Practice
Mills Corp. is a merchandising company that uses the periodic inventory system. Selected
account balances are listed below:
Sales
$1,035,0
00
Sales returns
20,000
15,000
W|w\Sales discounts
Purchases
470,000
25,000
Inventory (beginning)
Inventory (ending)
Operating Expenses
30,000
248,000
1,000
Interest revenue
Effective Income Tax Rate
30%
Based on the above determine COGS:
Goods available for sale
Chapter 6
Page 6-3

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