Merchandising versus Manufacturing Income Statements Notes...

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Merchandising versus Manufacturing Income Statements NotesUnder a periodic inventory system, the income statements of a merchandising company and a manufacturing company differ in the cost of goods sold section. For a merchandisingcompany, cost of goods sold is calculated by adding the beginning merchandise inventory and the cost of goods purchased, and subtracting the ending merchandise inventory. For a manufacturingcompany, cost of goods sold is calculated by adding the beginning finished goods inventory and the cost of goods manufactured, and subtracting the ending finished goods inventory. Cost of Goods Sold ComponentsMerchandising CompanyBeginning Merchandise InventoryCost of Goods PurchasedEnding Merchandise InventoryCost of Goods SoldManufacturing CompanyBeginning Finished Goods InventoryCost of Goods ManufacturedEnding Finished Goods InventoryCost of Goods Sold
Cost of Goods Sold Sections of Merchandising and Manufacturing CompaniesThe following cost of goods sold sections

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