Reconciliation of Broadway's cash to be received to its net profit: The cash amount to be received by Broadway ($6,064) includes the revenue from sales, but excludes the cost of goods sold and commissions. When we subtract the cost of goods sold ($3,420) from the cash to be received ($6,064), we get the net profit of $2,844. This confirms that the net profit matches the profit calculated in part b. In summary, Broadway's consignment inventory at the end of August is valued at $855, the profit for August is $2,844, and the cash to be received from Charlie Gardell's Hot Rod Shop is $6,064. The net profit of $2,844 reconciles with the cash to be received, showing that the calculations are consistent.
Hi, I refer to the question above (link provided above), answer item d, their explanation and calculation are listed below, but why $6,064 - $3,420 = $2,844, should it be $2,644? thank you.
d. Reconciliation of Broadway's cash to be received to its net profit: The cash amount to be received by Broadway ($6,064) includes the revenue from sales, but excludes the cost of goods sold and commissions. When we subtract the cost of goods sold ($3,420) from the cash to be received ($6,064), we get the net profit of $2,844. This confirms that the net profit matches the profit calculated in part b. In summary, Broadway's consignment inventory at the end of August is valued at $855, the profit for August is $2,844, and the cash to be received from Charlie Gardell's Hot Rod Shop is $6,064. The net profit of $2,844 reconciles with the cash to be received, showing that the calculations are consistent.
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