Chapter 4, Problem 3QS

Merchandise accounts and computations C2

Use the following information (in random order) from a merchandising company and from a service company.

1. For the merchandiser only, compute:
1. Goods available for sale.
2. Cost of goods sold.
3. Gross profit.
2. Compute net income for each company.

Kleiner Merchandising Company			Krug Service Company
Accumulated Depreciation ……….	$ 700		Expenses ………………..	$12,500
Beginning inventory ……………...	5,000		Revenues ……………….	14,000
Ending inventory …………………	1,700		Cash ……………………	700
Expenses ………………………….	1,450		Prepaid rent ……………	800
Net purchases …………………….	3,900		Accounts payable ………	200
Net sales ………………………….	9,500		Equipment ……………...	1,300