Chapter06 - 6-1 Chapter 6 Merchandising Activities...

Info iconThis preview shows pages 1–17. Sign up to view the full content.

View Full Document Right Arrow Icon
BUSI1002KLT, 07/08 6-1 Merchandising Activities Chapter 6
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-2 Learning Objective LO1 To describe the operating cycle of a merchandising company.
Background image of page 2
BUSI1002KLT, 07/08 6-3 Comparing a Service Company with a Merchandising Company Merchandising Company Service Company Provide services for fees while keeping some supplies needed for the service. Purchase inventory from other businesses in a ready-to-sell condition.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-4 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.
Background image of page 4
BUSI1002KLT, 07/08 6-5 Retailers and Wholesalers Retailers sell merchandise directly to the public. Wholesalers merchandise from several different manufacturers and then sell this merchandise to several retailers.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-6 Operating Cycle of a Merchandising Company 1. Purchase of merchandise 3. Collection of the receivables on account Cash Inventory Accounts Receivable
Background image of page 6
BUSI1002KLT, 07/08 6-7 Learning Objective LO2 To understand the components of a merchandising company’s income statement.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-8 Income Statement of a Merchandising Company Computer City Condensed Income Statement For the Year Ended December 31, 2007 Revenue from sales 900,000 $ Less: Cost of goods sold 540,000 Gross profit 360,000 $ 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.
Background image of page 8
BUSI1002KLT, 07/08 6-9 Accounting System Requirements for Merchandising Companies General Ledger Accounts Receivable Date Debit Credit Balance 2007 June 1 10,000 10,000 15 3,000 7,000 Although general ledger accounts provide useful information, they do not provide much of the detailed information needed in the daily business operations. Who owes us money?
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-10 Accounting System Requirements for Merchandising Companies Subsidiary Ledger Heather Jacobs Date Debit Credit Balance 2007 June 1 7,000 7,000 15 2,000 5,000 General Ledger Accounts Receivable Date Debit Credit Balance 2007 June 1 10,000 10,000 15 3,000 7,000 Subsidiary Ledger Jake Sparks Date Debit Credit Balance 2007 June 1 3,000 3,000 15 1,000 2,000 Control Account Subsidiary Ledgers
Background image of page 10
BUSI1002KLT, 07/08 6-11
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-12 Two Approaches Used in Accounting for Merchandise Inventories Perpetual Inventory System Periodic Inventory System
Background image of page 12
BUSI1002KLT, 07/08 6-13 Learning Objective LO3 To account for purchases and sales of merchandise in a perpetual inventory system.
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-14 Perpetual Inventory Systems The inventory account is continuously updated to reflect items on hand. Let’s look at some entries!
Background image of page 14
BUSI1002KLT, 07/08 6-15 Perpetual Inventory Systems On September 5, Worley Co. purchased 100 laser lights for resale for $30 per unit from Electronic City on account.
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
BUSI1002KLT, 07/08 6-16 Perpetual Inventory Systems On September 10, Worley Co. sold 10 laser lights for $50 per unit on account to ABC Radios.
Background image of page 16
Image of page 17
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/20/2010 for the course BUSI BUSI1002 taught by Professor Drjasmine during the Spring '10 term at HKU.

Page1 / 77

Chapter06 - 6-1 Chapter 6 Merchandising Activities...

This preview shows document pages 1 - 17. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online