Chapter 4, Problem 6BTN

TEAMWORK IN ACTION C1 C2

BTN 4-6 Official Brands’s general ledger and supplementary records at the end of its current period reveal the following.

Sales. Gross	$60,000	Merchandise inventory (beginning of period)	$98,000
Sales returns & allowances	20,000	Invoice cost of merchandise purchases	360,000
Sales discounts	13,000	Purchases discounts received	9,000
Cost of transportation-in	22,000	Purchases returns and allowances	11,000
Operating expenses	50,000	Merchandise inventory (end of period)	84,000

Required

1. Each member of the team is to assume responsibility for computing one of the following items. You are not to duplicate your teammates’ work. Get any necessary amounts to compute your item from the appropriate teammate. Each member is to explain his or her computation to the team in preparation for to the class.
1. Net sale
2. Total cost of merchandise purchases
3. Cost of goods sold
4. Net income
2. Check your net income with instructor. If correct, proceed to step 3.
3. 3. Assume that a physical inventory count finds that actual ending inventory is $76,000. Describe how this affects previously computed amounts in step 1.
Point: In terms of four, assign the same student a and e. Rotate teams for reporting an a different computation and the analysis in step3.