MGMT 20000 Chapter Notes - Chapter 6: Earnings Before Interest And Taxes, C Corporation, Current Asset

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Kimberly Fatten

Document Summary

Part a understanding inventory and cost of goods sold. Learning objective 1 trace the flow of inventory costs from manufacturing companies to. Includes items a company intends for sale to customers: also includes items that are not yet finished products. Cost of goods sold: cost of the inventory that is sold during the period. Manufacturing companies: manufacture the inventories they sell, rather than buying them in finished form from suppliers. Merchandising companies: purchase inventory that are primarily in finished form for resale to customers, wholesalers: Resell inventory to retail companies or to professional users: retailers. Purchases inventory from manufacturers or wholesalers and then sell this inventory to end users. Learning objective 2 understand how cost of goods sole is reported in a multiple-step income. Gross profit: first level of profit shown in the multiple-step income statement and is calculated as: Net sales cost of goods sold.