Objective 2.6 1) Which of the following formulas determine cost of goods sold in a merchandising ent

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Objective 2.6

1) Which of the following formulas
determine cost of goods sold in a merchandising entity?
A) Beginning inventory + Purchases +
Ending inventory = Cost of goods sold
B) Beginning inventory + Purchases –
Ending inventory = Costs of goods sold
C) Beginning inventory – Purchases +
Ending inventory = Cost of goods sold
D) Beginning inventory – Ending inventory
– Purchases = Cost of goods sold

2) Which of the following formulas
determine cost of goods sold in a manufacturing entity?
A) Beginning work-in-process inventory +
Cost of goods manufactured – Ending work-in-process inventory = Cost of goods
sold
B) Beginning work-in-process inventory +
Cost of goods manufactured + Ending work-in-process inventory = Cost of goods
sold
C) Cost of goods manufactured – Beginning
finished goods inventory – Ending finished goods inventory = Cost of goods sold

D) Cost of goods manufactured + Beginning
finished goods inventory – Ending finished goods inventory = Cost of goods sold

3) A company reported revenues of
$375,000, cost of goods sold of $118,000, selling expenses of $11,000, and
total operating costs of $70,000. Gross margin for the year is ________.
A) $257,000
B) $246,000
C) $176,000
D) $252,000

Answer
the following questions using the information below:

Leslie
Manufacturing reported the following:

Revenue

$450,000

Beginning inventory of direct materials,
January 1, 2015

20,000

Purchases of direct materials

156,000

Ending inventory of direct materials,
December 31, 2015

18,000

Direct manufacturing labor

21,000

Indirect manufacturing costs

42,000

Beginning inventory of finished goods,
January 1, 2015

40,000

Cost of goods manufactured

114,000

Ending inventory of finished goods,
December 31, 2015

45,000

Operating costs

150,000

4) What is Leslie’s cost of goods sold?
A)
$103,000
B)
$109,000
C)
$112,000
D)
$118,000

5) What is Leslie’s gross margin (or gross
profit)?
A)
$103,000
B)
$152,000
C)
$341,000
D)
$317,000

6) Inventoriable costs and period costs
flow through the income statement at a merchandising company similar to the way
costs flow at a manufacturing company.

7)
Cost of goods sold refers to the products brought to completion, whether they
were started before or during the current accounting period.

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