The cost of goods sold and total operating expenses of a merchandising company are both understated by P5,300 and P 3,500 respectively. As a result of these errors, the company's gross margin is overstated (understated) by how much
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- If the ending inventory of a firm is overstated by $49,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) operating income ? By ?Assume that the ending inventory of a merchandising firm is overstated by $40,000. a. By how much and in what direction (overstated or understated) will the firms cost of goods be misstated? b. If this error is not corrected, what effect will it have on the subsequent period's operating income? c. If this error is not corrected, what effect will it have on the total operating income of the two periods (the period in which there is an error and the subsequent period) combined?Presented below are the components in Sunland Company’s income statement.Determine the missing amounts. Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income (a) $78,400 $ $39,300 $ $14,600 (b) $110,500 $76,900 $ $ $23,200 (c) $ $79,900 $84,400 $47,300 $
- The following are the components in Cullumber Company’s income statement.Determine the missing amounts. Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income (a) $75,900 $enter a dollar amount $37,000 $enter a dollar amount $17,500 (b) $110,900 $79,800 $enter a dollar amount $enter a dollar amount $25,300 (c) $enter a dollar amount $74,200 $81,700 $44,800 $enter a dollar amount1. Which of the following would not be considered as a component of the "cost" of Goods Sold?a. Salesforce salariesb. Transportation purchasec. Import duties or raw materiald. Factory electricity expense 2. Revenue minus all direct costing of making the goods or supplying the service is known as?a. Gross profitb. Cost of salesc. Expensesd. Net profit 3. During the costing process, to arrive at the gross profit of a trading business, which one of the following formulas is applied?a. Sales - (Beginning Inventory - Purchases - Ending Inventory)b. Sales - (Beginning Inventory + Purchases + Ending Inventory)c. Sales - (Beginning Inventory + Purchases - Ending Inventory)d. Sales - (Beginning Inventory - Purchases + Ending Inventory)Erin international, a merchandising company, reported the following results for July. Cost of Goods Sold 285,141 Fixed selling and administrative expense 49,989 Sales Revenue 518,234 Variable selling and administrative expense 87,514 This question is independent of all other questions. Please use only the information in this question to calculate the answer. Based on the information provided above, calculate the gross margin for July. Cost of goods sold is a variable cost in this company. Enter only the amount of the gross margin in the box provided below. Enter the amount only. Do not enter letters, words, or the calculation.
- An employee accidentally overstated the year’s advertising expense by $50,000. Which of the following statement is correct regarding the consequence of this error? Multiple Choice Cost of goods sold (COGS) will be overstated by $50,000 COGS will be overstated by $50,000 and COGM will be understated by $50,000 None of the answers provided is correct Both COGM and COGS will be overstated by $50,000. Cost of goods manufactured (COGM) will be overstated by $50,000The problem is stated in the picture. Here is the question: 1. Assume instead, the Company uses the FIFO method in the measurement of its inventories, how much would be its cost of goods sold for the year?Using the financial information presented for Alexandria Co., compute the missing amounts. Do not include dollar signs or commas in your answers. If an amount is to be deducted, do NOT include parentheses or negative signs. Sales revenue Sales returns and allowances 40,000 Net sales 90,000 Cost of goods sold Gross profit 70,000 Operating expenses Net income 20,000
- Suppose Ajax Corporation overstates its ending inventory amount. What effect will this have on the reported amount of cost of goods sold in the year of the error? a. Overstate cost of goods sold.b. Understate cost of goods sold.c. Have no effect on cost of goods sold.d. Not possible to determine with information given.Indicate whether the following statements are true or false. 1. A merchandising company reports gross profit but a service company does not. 2. Under a periodic inventory system, a company determines the cost of goods sold each time a sale occurs. 3. A service company is likely to use accounts receivable but a merchandising company is not likely to do so. 4. Under a periodic inventory system, the cost of goods on hand at the beginning of the accounting period plus the cost of goods purchased less the cost of goods on hand at the end of the accounting period equals cost of goods sold.Given the following information regarding to a recent period's operations: Sales - P? Beginning finished goods inventory - P12,000 Cost of goods manufactured - P36,000 Ending finished goods inventory - P6,000 Cost of goods sold - P? Gross margin - 40% of Sales Administrative and selling expenses_P10,000 Net operating income - P? Determine the following: • cost of goods sold • cost of goods available for sale • net operating income • gross margin • sales
