Official Brands’ general ledger and supplementary records at the end of its current period re¬ veal the following

Required 1. Each member of the team is to assume responsibility for computing one of the following items. You are not to duplicate your teammates’ work. Get any necessary amounts to compute your item from the appropriate teammate. Each member is to explain his or her computation to the team in preparation for reporting to the class.

a. Net sales

d. Gross profit

b. Total cost of merchandise purchases

e. Net income

c. Cost of goods sold 2. Check your net income with the instructor. If correct, proceed to step 3.
3. Assume that a physical inventory count finds that actual ending inventory is $76,000. Discuss how this affects previously computed amounts in step 1.

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Sales $600,000 Merchandise inventory (beginning of period) $ 98,000 Sales returns 20,000 Sales discounts 13,000 Invoice cost of merchandise purchases Purchase discounts received... 360,000 9,000 Cost of transportation-in 22,000 Purchase returns and allowances 11,000 Operating expenses 50,000 Merchandise inventory (end of period) 84,000