Connect 1 Semester Access Card for Fundamentals of Financial Accounting
5th Edition
ISBN: 9781259128547
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 6, Problem 6.4ME
Inferring Purchases Using the Cost of Goods Sold Equation
Dillard’s, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2013 third-quarter report, the company reported Cost of Goods Sold of $1.0 billion, ending inventory for the third quarter of $1.8 billion, and ending inventory for the previous quarter of $1.5 billion. Determine the amount of merchandise purchases for the third quarter.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Use the following financial information to find the entry you would make on an income statement for COST OF GOODS SOLD for the year ended December 31, 2011:
Gross Sales, $241,000; Sales Returns and Allowances, $5,600; Sales Discounts, $1,000; Merchandise Inventory, January 1, 2011, $62,500; Merchandise Inventory, December 31, 2011, $70,200; net purchases, $95,600; Freight In, $525; Salaries, $93,800;
Rent, $17,900; Utilities, $1,325; Insurance, $2,025; and Income Tax, $16,950.
O $38,200
$70,525
O $88,425
$234,400
X
Determining Cost of Goods Sold
For a recent year, TechMart reported sales of $30,742 million. Its gross profit was $7,071 million.
What was the amount of TechMart's cost of goods sold? (Enter answer in millions.)
please do not give answer image
Chapter 6 Solutions
Connect 1 Semester Access Card for Fundamentals of Financial Accounting
Ch. 6 - Prob. 1QCh. 6 - If a Chicago-based company ships goods on...Ch. 6 - Define goods available for sale. How does it...Ch. 6 - Define beginning inventory and ending inventory.Ch. 6 - Describe how transportation costs to obtain...Ch. 6 - What is the main distinction between perpetual and...Ch. 6 - Why is a physical count of inventory necessary in...Ch. 6 - What is the difference between FOB shipping point...Ch. 6 - Describe in words the journal entries that are...Ch. 6 - What is the distinction between Sales Returns and...
Ch. 6 - Prob. 11QCh. 6 - In response to the weak economy, your companys...Ch. 6 - Prob. 13QCh. 6 - Why are contra-revenue accounts used rather than...Ch. 6 - What is gross profit? How is the gross profit...Ch. 6 - Prob. 1MCCh. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Distinguishing among Operating Cycles Identify the...Ch. 6 - Calculating Shrinkage in a Perpetual Inventory...Ch. 6 - Prob. 6.3MECh. 6 - Inferring Purchases Using the Cost of Goods Sold...Ch. 6 - Evaluating Inventory Cost Components Assume...Ch. 6 - Prob. 6.6MECh. 6 - Recording Journal Entries for Purchases and Safes...Ch. 6 - Prob. 6.8MECh. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Prob. 6.10MECh. 6 - Prob. 6.11MECh. 6 - Calculating Shrinkage and Gross Profit in a...Ch. 6 - Preparing a Multistep Income Statement Sellall...Ch. 6 - Prob. 6.14MECh. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Interpreting Changes in Gross Profit Percentage...Ch. 6 - Prob. 6.17MECh. 6 - Understanding Relationships among Gross Profit and...Ch. 6 - Relating Financial Statement Reporting to Type of...Ch. 6 - Prob. 6.2ECh. 6 - Identifying Shrinkage and Other Missing inventory...Ch. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Reporting Purchases, Purchase Discounts, and...Ch. 6 - Prob. 6.10ECh. 6 - Items Included in Inventory PC Mall, Inc., is a...Ch. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Reporting Net Sales with Credit Sales and Sales...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.19ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - (Supplement 6A) Recording Purchases and Sales...Ch. 6 - Prob. 6.1CPCh. 6 - Prob. 6.2CPCh. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Prob. 6.1PACh. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Recording Sales with Discounts and Returns and...Ch. 6 - Prob. 6.4PACh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Prob. 6.1PBCh. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Prob. 6.3PBCh. 6 - Prob. 6.4PBCh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Accounting for Inventory Orders, Purchases, Sales,...Ch. 6 - Prob. 6.1SDCCh. 6 - Prob. 6.2SDCCh. 6 - Internet-Based Team Research: Examining an Annual...Ch. 6 - Evaluating the Results of Merchandising Operations...Ch. 6 - Prob. 6.6SDCCh. 6 - Prob. 6.1CC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following data: Required: 1. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method. Be sure to explain what each ratio means. 2. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method. Be sure to explain what each ratio means. 3. CONCEPTUAL CONNECTION Which ratios-the ones computed using FIFO or LIFO inventory values-provide the better indicator of how successful McLelland was at managing and controlling its inventory?arrow_forwardCost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?arrow_forwardCalculate the cost of goods sold dollar value for A67 Company for the month, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG).arrow_forward
- Inventory Analysis The following account balances are taken from the records of Lewis Inc., a wholesaler of fresh fruits and vegetables: Required Compute Lewiss inventory turnover ratio for 2016 and 2015. Compute the number of days sales in inventory for 2016 and 2015. Assume 360 days in a year. Comment on your answers in parts (1) and (2) relative to the companys management of inventory over the two years. What problems do you see in its inventory management?arrow_forwardCalculating the CCC from the Financial Statement The following data are taken from the financial statement: Annual Sales ( on Credit ) 1,216,666 Cost of Goods Sold 1,013,889 Average Inventory 250,000 Average Accounts Receivable 300,000 Average Accounts Payable 150,000 COMPUTE FOR THE FOLLOWING and interpret your answer: 1. DIO stands for Days Inventory Outstanding 89.99999014 DIO= (Ave. Inventory/Cost of Goods Sold)*365 =(250,000/1,013,889)*365 =89.99 or 90 days It takes the company approximately 90 days to turn inventory into sales 2. DSO stands for Days Sales Outstanding 90.00004932 DSO=(Ave. Accts. Receivables/Total Credit Sales)*365 =(300,000/1,216,666)*365 =90 days #NAME? 3. DPO stands for Days Payable Outstanding 53.99999408 DPO=(Ave. Accts. Payables/Cost of Goods Sold)*365 =(150,000/1,013,889)*365 =53.99 or 54 days It takes the company approximately 54 days to pay its invoices 4.CASH CONVERSION CYCLE 126.0000454 CCC= DIO + DSO - DPO = 90+90-54 = 126 It takes the company…arrow_forwardUse the following selected information from Whitman Corp. to determine the Year 1 and Year 2 common size percentages for cost of goods sold using Net sales as the base.arrow_forward
- Determining gross profit During the current year, merchandise is sold for $8, 100,000. The cost ofthe goods sold is $4,698,000. a. What is the amount of the gross profit?b. Compute the gross profit percentage (gross profit divided by sales).c. Will the income statement always report a operating income? Explain.arrow_forwardUse the following selected information from Corolla to determine the Year 1 and Year 2 trend percentages for net sales using Year 1 as the base. Year 2 Year 1 Net sales $ 281,200 $ 232,400 Cost of goods sold 150,900 130,590 Operating expenses 54,240 52,240 Net earnings 29,020 20,820arrow_forwardThe following selected amounts were extracted from the financial statements of Boston Corporation. Net sales Cost of goods sold Gross margin Year 4 Year 3 Year 2 Year 1 $ 1,75,000 $ 1,70,000 $1,65,000 $1,50,000 1,09,000 66,000 1,04,500 1,00,500 65,500 64,500 93,000 57,000 Prepare a trend analysis for net sales, cost of goods sold, and gross margin.arrow_forward
- Calculate activity measures The following information was available for the year ended December 31, 2016:Net sales $365,000Cost of goods sold 292,000Average accounts receivable for the year 14,600Accounts receivable at year-end 16,000Average inventory for the year 73,000Inventory at year-end 78,400Required:Calculate the inventory turnover for 2016.Calculate the number of days’ sales in inventory for 2016, using year-end inventories.Calculate the accounts receivable turnover for 2016.Calculate the number of days’ sales in accounts receivable for 2016, using year-end accounts receivable.arrow_forward1. The Income statement for STEM Store for the year ended 31 December 2021 with the following data: 192,000 29,700 31,200 13,400 107,000 28,100 Gross Sales P Beginning Inventory Ending Inventory Sales Returns and allowances Net purchases Operating Expenses Determine the STEM Store's: a) Net Sales b) Cost of Goods Sold c) Gross Profit from Sales d) Net Incomearrow_forwardsolve firstarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Job Cost Sheet - Job Cost Accounting System; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=ElD8nKNXE1I;License: Standard Youtube License