33:382:103 Lecture Notes - Lecture 6: Net Income
Document Summary
Accounting for entre and sb: lecture #6 (chapter 6) Merchandise inventory is moved to cost of goods sold. What"s in your inventory is what you own. If i sold 2 units, my ending inventory is 8 units. Cost of goods sold is 2 units. Sales minus cost of goods sold is gross pro t. Using fifo, the list of products above would state: Sales (50. 00) minus cost of goods sold (20. 50) equals gross pro t (29. 50) Cost of goods sold ( rst 2 units): 1 @10. 00, 1 @10. 50 so 2 units = 20. 50. Ending inventory (the rest) : 4 @ 11. 50, 3 @ 11. 00, and 1 @ 10. 50 so 8 units = Lifo: last-in, first-out: products that are most recent come rst in cost of goods sold, and products sold rst are ending inventory. Sales (50. 00) minus cost of goods sold (21. 00) equals gross pro t (29. 00) Cost of goods sold (last 2 units): 2 @ 10. 50.