Answer:
A. Unimart Cost of goods sold $520,000
B. Precision Manufacturing Cost of goods sold $1,100,000
Explanation:
Computation for the cost of goods sold for each of these two companies for the year
a) Computation for the cost of goods sold for UNIMART
UNIMART Partial income statement For the year ended December 31
COST OF GOODS SOLD:
Beginning merchandise inventory $ 234,000
Add Cost of purchase $420,000
Goods available for sale $654,000
($234,000+$420,000)
Less: Ending merchandise inventory ($134,000)
Cost of goods sold $520,000
($654,000-$134,000)
Therefore the Cost of goods sold for UNIMART $520,000
b) Computation for the cost of goods sold for PRECISION MANUFACTURING
PRECISION MANUFACTURING
Partial income statement For the year ended December 31
COST OF GOODS SOLD:
Beginning finished goods inventory $ 468,000
Add Cost of manufactured $760,000
Goods available for sale $1,228,000
($468,000+$760,000)
Less: Ending finished goods inventory ($128,000)
Cost of goods sold $1,100,000
($1,228,000-$128,000)
Therefore the Cost of goods sold for PRECISION MANUFACTURING is $1,100,000
