05 Inventory and COGS - 20/01/2011 EngineeringFinanceand...

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20/01/2011 1 1 Engineering Finance and Economics 5. Inventory and Cost of Goods Sold 2 6 2 Income Statements Service revenue $XXX Expenses Operating and administrative expense X Amortization expense X Income tax expense X Net income $ X Service Company Royal LePage Real Estate Income Statement For the Year Ended December 31, 2008 Revenue $1,331 Cost of goods sold 853 Gross margin 478 Operating expenses: Operating and administrative expense X Amortization expense X Income tax expense $ X Net income $ 4 Merchandising Company The Forzani Group Ltd. Income Statement For the Year Ended February 3, 2008 3 6 3 Balance Sheets Current assets: Cash $X Short-term investments X Accounts receivable, net X Prepaid expenses X Service Company Royal Lepage Real Estate Balance Sheet December 31, 2008 Current assets: Cash $ X Short-term investments X Accounts receivable, net X Inventory 319 Prepaid expenses X Merchandising Company The Forzani Group Ltd. Balance Sheet February 3, 2008
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20/01/2011 2 4 Inventory Manufacturing companies Raw materials Work in process Finished goods Office supplies and other such items (sometimes booked as Prepaid Expenses) Service companies Office supplies and other such items (sometimes booked as Prepaid Expenses) 5 Accounting for Inventory Balance sheet Inventory = cost of inventory on hand Income statement Cost of Goods Sold (COGS) = cost of inventory that was sold during the income reporting period 6 Accounting Principles and Inventory
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This note was uploaded on 07/10/2011 for the course FINANCE MGT337 taught by Professor Huggins during the Spring '08 term at University of Toronto- Toronto.

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05 Inventory and COGS - 20/01/2011 EngineeringFinanceand...

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