
Concept explainers
a.
Cost of Goods Sold
Cost of goods sold indicates the costs involved for the inventory sold by the business in a specific period of time. Its mathematical representation is as below:
To Calculate: The cost of goods sold of Company H.
b.
Gross profit represents the revenue after the deduction of cost of goods sold from the net sales of a business. Its mathematical representation is as below:
To Calculate: The gross profit to be reported on the income statement for the year ended April 30, 2016.
c.
To Explain: Whether the gross profit is different if the perpetual inventory system was used instead of the periodic inventory system.

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