Copyright

1. Fill In the missing data for the retail organization. First Quarter Second Quarter Third...

Question:

1. Fill In the missing data for the retail organization.

First Quarter Second Quarter Third Quarter Fourth Quarter
Sales $10 $15
Gross margin $4 $5
Ending merchandise inventory $5 $5
Beginning merchandise inventory $4 $5
Net cost of purchases $7 $11
Operating income $3 $2 $2
Operating expenses $2 $1 $4
Cost of goods sold $5 $8 $12
Cost of goods available for sale $12 $15 $15

2. Fill in the missing data for the manufacturing organization.

First Quarter Second Quarter Third Quarter Fourth Quarter
Ending finished goods inventory $3 $6
Cost of goods sold $6 $3 $5
Operating income $2 $3 $2
Cost of goods available for sale $8 $10 $13
Cost of goods manufactured $5 $8
Gross margin $4 $7
Operating expenses $2 $4 $5
Beginning finished goods inventory $2 $3
Sales $10 $14

Gross Margin and Operating Income

Gross Margin is the net residual amount on sales after deducting the cost of goods sold. Operating income is the residual amount in gross margin after deducting operating expenses.

Answer and Explanation:

1. To fill In the missing data for the retail organization, we need the following formulas as guidance:

Sales - Cost of Goods Sold = Gross Margin

Gross Margin - Operating Expenses = Operating Income

Beginning Inventory + Net Cost of Purchases - Ending Inventory = Cost of Goods Sold

Beginning Inventory + Net Cost of Purchases = Cost of Goods Available for Sale

First Quarter Second Quarter Third Quarter Fourth Quarter
Sales 10 12 15 18
Gross margin 5 4 5 6
Ending merchandise inventory 5 4 5 3
Beginning merchandise inventory 4 5 4 5
Net cost of purchases 6 7 11 10
Operating income 3 2 4 2
Operating expenses 2 2 1 4
Cost of goods sold 5 8 10 12
Cost of goods available for sale 10 12 15 15

2. To fill in the missing data for the manufacturing organization, we need the following formulas as guidance:

Sales - Cost of Goods Sold = Gross Margin

Gross Margin - Operating Expenses = Operating Income

Beginning Inventory + Cost of Goods manufactured - Ending Inventory = Cost of Goods Sold

Beginning Inventory + Cost of goods manufactured = Cost of Goods Available for Sale

First Quarter Second Quarter Third Quarter Fourth Quarter
Ending finished goods inventory 2 3 5 6
Cost of goods sold 6 3 5 7
Operating income 2 3 2 2
Cost of goods available for sale 8 6 10 13
Cost of goods manufactured 5 4 7 8
Gross margin 4 7 6 7
Operating expenses 2 4 4 5
Beginning finished goods inventory 3 2 3 5
Sales 10 10 11 14

Learn more about this topic:

Loading...
How to Calculate Gross Profit Margin: Definition & Formula

from Financial Accounting: Help and Review

Chapter 5 / Lesson 17
11K

Related to this Question

Explore our homework questions and answers library