Use the following information (in random order) from a merchandising company and from a service company. Mchell Merchandising Company Accumulated depreciation Beginning inventory Ending inventory Expenses Net purchases Net sales Krug Service Company Expenses Revenues Cash Prepaid rent Accounts payable Equipment $ 10,000 34,000 Goods available for sale a. Cost of goods sold a. Gross profit 900 620 200 $.700 15,000 9,000 2,450 19,900 29,500 6. Compute the goods available for sale, the cost of goods sold and gross profit for the merchandiset Hint Not all information may be necessary. b. Compute net income for each company b. Not income for Krug Service Company b. Not income for McNel Merchandising Company $ 34,900 a

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…