question archive The following data are for Marvin Department Store
The following data are for Marvin Department Store
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The following data are for Marvin Department Store. The account balances (in thousands) are for 2017
Requirements
1. Compute (a) the cost of goods purchased and (b) the cost of goods sold.
(a) Calculate the cost of goods purchased by completing the schedule. (If a box is not used in the schedule, leave the box empty; do not select a label or enter a zero.) Marvin Department Store Schedule of Cost of Goods Purchased For the Year Ended December 31, 2017 (in thousands) Add: Deduct: Cost of goods purchased
2. Prepare the income statement for 2017
|
Marketing, distribution, and customer-service costs |
$37,000 |
|
Merchandise inventory, January 1, 2017 |
27,000 |
|
Utilities |
17,000 |
|
General and administrative costs |
43,000 |
|
Merchandise inventory, December 31, 2017 |
34,000 |
|
Purchases |
155,000 |
|
Miscellaneous costs |
4,000 |
|
Transportation-in |
7,000 |
|
Purchase returns and allowances |
4,000 |
|
Purchase discounts |
6,000 |
|
Revenues |
280,000 |
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Answers:
1(a)
| Marvin Department store | ||
| Scheduled of cost of goods purchased | ||
| For the year ended December 31,2017 | ||
| (In thousands) | ||
| Purchases | $155,000 | |
| Add: transportation - in | $7,000 | |
| $162,000 | ||
| Deduct: | ||
| Purchases return and allowances | $4,000 | |
| Purchase discount | $6,000 | ($10,000) |
| Cost of good purchased | $152,000 | |
1(b)
| Marvin department store | |
| Scheduled of cost of good sold | |
| For the year ended December 31,2017 | |
| (In thousands) | |
| Beginning merchandise inventory, January 1, 2017 | $27,000 |
| Cost of good purchased (see above) | $152,000 |
| Cost of goods available for sale | $179,000 |
| Ending merchandise inventory , December 31, 2017 | ($34,000) |
| Cost of good sold | $145,000 |
Requirement 2)
| Marvin department store | ||
| Income statement | ||
| year ended December 31, 2017 | ||
| (In thousands) | ||
| Revenues | $280,000 | |
| Cost of good sold (see above) | ($145,000) | |
| Gross Margin | $135,000 | |
| Operating costs: | ||
| Marketing, distribution, and customer- service costs | $37,000 | |
| Utilities | $17,000 | |
| General and administrative costs | $43,000 | |
| Miscellaneous costs | $4,000 | |
| Total operating cost | ($101,000) | |
| Operating income | $34,000 | |
