FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Official Brands’s general ledger and supplementary records at the end of its current period
reveal the following. Sales, gross . $600,000 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
reporting to the class.
a. Net sales d. Gross profit
b. Total cost of merchandise purchases e. Net income
c. Cost of goods sold
2. Check your net income with the instructor. If correct, proceed to step 3.
3. Assume that a physical inventory count finds that actual ending inventory is $76,000. Discuss how this
affects previously computed amounts in step 1.
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