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Presented below are the components in Waegelain Company's income statement. Determine the missing amounts.
sales Cost of goods gross profits operating Expenses Net Income
a. 80,000 - 35,040 20,900
b. 117,700 76,830 - - 23,580
c. - 25,360 84,050 49,340 -
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∙ 12y ago
The income statement of a merchandising company shows the company's revenue, cost of goods sold, and operating expenses. It calculates the gross profit by subtracting the cost of goods sold from the revenue and then deducts the operating expenses to arrive at the net income. The income statement is used to assess the profitability and financial performance of the company.
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Is the measure of net income for a merchandising company conceptually the same for a service company?
Well if you look at it by the basics you will see both use the same Net income = revenue - expenses. However the income statement for the service company subtracts the operating expenses from the revenues to arrive at net income. The merchandising company subtracts the cost of merchandising from the revenue to arrive at gross profit. It then subtracts all other operating expenses to arrive at net income.
Is the measurement of net income for a merchandising company conceptually the same as for a service company?
Well if you look at it by the basics you will see both use the same Net income = revenue - expenses. However the income statement for the service company subtracts the operating expenses from the revenues to arrive at net income. The merchandising company subtracts the cost of merchandising from the revenue to arrive at gross profit. It then subtracts all other operating expenses to arrive at net income.
What is difference between a merchandising company income statement and manufacturing company income statement?
Merchandising companies do not calculate the raw materials placed in production or cost of goods manufactured. Merchandisers purchase goods from suppliers instead of manufacturing goods. The cost of these purchases from suppliers is often called net purchases in the income statement, in contrast to cost of goods manufactured in a manufacturer’s income statement. The net purchases line consists of purchases, purchases returns and allowances, purchases discounts, and freight in. Merchandisers do not use the schedule of cost of goods manufactured (and related schedule of raw materials placed in production). Merchandisers use an account called merchandise inventory, or simply inventory, instead of finished goods inventory. This reflects that merchandisers do not produce goods.
How do you do a budgeted income statement for a merchandising firm?
To do a budgeted income statement for a merchandising firm you will need to look over their sales budget and cash budget. You will also need to prepare a finished goods inventory and come up with an administrative expense budget.?æ
Difference between marchindising income statement and manufacturing income statement?
Both statements are difference in this way that in merchandising income statement there is only one purchases items while in manufacturing income statement there is complete manufacturing account is also prepared to show manufacturing process as well.
What is the difference between a merchandising company and service company?
There are different ways in how two income statements are prepared. For example: the income statement (also known as P&L) of a merchandising company consists of Revenue, Expenses (related to the sales volume through the Cost of Goods Sold (COGS) and General & Administrative Expense (G&SA), which all result in Net Income. The income statement of a Service company consists of Service Revenue minus any Expenses related to that service, which results in Net Income.Another way to look at it is that inventory never leaves the balance sheet until it is physically sold to a customer, which transfers it to Cost of Goods Sold.
Which financial statement shows the net income earned by a company?
The income statement.
Would a traditional income statement differ depending on whether the business is a service organization merchandiser or manufacturer?
A traditional income statement would differ depending on whether a business was service-oriented, a merchandiser, or a manufacturer. The manufacturing company transforms raw material into finished goods through the use of labor and factory facilities and a merchandising company, such as a retail furniture store which buys finished furniture and sells it in the same form i.e sells the goods it buys without changing the basic form. The income statement which is prepared by a merchandising concern needs no calculations of cost of goods manufactured. But the income statements prepared by the manufacturing concern requires the calculations for the cost of goods manufactured. So the financial statements prepared by a manufacturing company are more complex than the statements prepared by a merchandising company. The manufacturer company involves many costs that the merchandisers do not have. It is clear that the manufacturing company will have a more complex and varied cost components vs. a merchandiser and a service organization.
What statement summarizes the results of the company's operations?
The income statement summarizes the results of the company's operations.
Is Apple manufacturing company or merchandising company?
Both but mostly merchandising company
What are the journal entries a merchandising organization would use to record the purchase and subsequent sale of merchandise?
Merchandising, Recording Purchases of Merchandise, Recording Sales of Merchandise, Income Statement Presentation Operations, and Evaluating Profitability.
What is budgeted income statement?
Budgeted income statement is the projected or planned income statement based on standard amounts to foresee the future business or company position before it
