2-1 CHAPTER 2 AN INTRODUCTION TO COST TERMS AND PURPOSES 2-29Computing cost of goods purchased and cost of goods sold. 1a. Marvin Department Store Schedule of Cost of Goods Purchased For the Year Ended December 31, 2011 (in thousands) Purchases $155,000 Add transportation-in 7,000 162,000 Deduct: Purchase returns and allowances $4,000 Purchase discounts 6,000 10,000 Cost of goods purchased $152,000 1b. Marvin Department Store Schedule of Cost of Goods Sold For the Year Ended December 31, 2011 (in thousands) Beginning merchandise inventory 1/1/2011 $ 27,000 Cost of goods purchased (see above) 152,000 Cost of goods available for sale 179,000 Ending merchandise inventory 12/31/2011 34,000 Cost of goods sold $145,000 2. Marvin Department Store Income Statement Year Ended December 31, 2011 (in thousands) Revenues $280,000 Cost of goods sold (see above) 145,000 Gross margin 135,000 Operating costs Marketing, distribution, and customer service costs $37,000 Utilities 17,000 General and administrative costs 43,000 Miscellaneous costs 4,000 Total operating costs 101,000 Operating income $ 34,000
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