Merchandising Activities.pdf - Chapter 6 Merchandising Activities Comparing Merchandising Activities with Manufacturing Activities Purchase inventory in

Merchandising Activities.pdf - Chapter 6 Merchandising...

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Merchandising Activities Chapter 6
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Comparing Merchandising Activities with Manufacturing Activities Merchandising Company Purchase inventory in ready-to-sell condition. Manufacturing Company Manufacture inventory and have a longer and more complex operating cycle.
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Income Statement of a Merchandising Company Computer City Condensed Income Statement For the Year Ended December 31, 2010 Revenue from sales 900,000 $ Less: Cost of goods sold 540,000 Gross profit 360,000 $ Less: Expenses 270,000 Net income 90,000 $ Cost of goods sold represents the expense of goods that are sold to customers. Gross profit is a useful means of measuring the profitability of sales transactions.
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Operating Cycle of a Merchandising Company 2. Sale of merchandise on account Cash Inventory Accounts Receivable The series of transactions through which a business generates its revenue and its cash receipts from customers is called the OPERATING CYCLE.
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