BUS 4061 Problem 14-5B

Problem 14-5B

1. Inventory computation and reportingC4P1

Shown here are annual financial data at December 31, 2017, taken from two different companies.

TEEMART AIMLABS

RETAIL MANUFACTURING

BEGINNING INVENTORY

MERCHANDISE 100,000

FINISHED GOODS 300,000

COST OF PURCHASES 250,000

COST OF GOODS MANUFACTURED 586,000

ENDING INVENTORY

MERCHANDISE 150,000

FINISHED GOODS 200,000

Required

1.Compute the cost of goods sold section of the income statement at December 31, 2017, for each company. Include the proper title and format in the solution.

Check (1) Tee Mart cost of goods sold, $200,000

2.Write a half-page memorandum to your instructor(a) identifyingthe inventory accounts and(b) identifyingwhere each is reported on the income statement and balance sheet for both companies.