Kleiner Merchandising Company

Accumulated depreciation $ 700

Beginning inventory 5,000

Ending Inventory 1,700

Expenses 1,450

Net Purchases 3,900

Net Sales 9,500

Krug Service Company

Expenses $ 12,500

Revenues 14,000

Cash 700

Prepaid rent 800

Accounts payable 200

Equipment 1,300

Required:

a. Compute gross profit, the goods available for sale, and the cost of goods sold for the merchandiser. Hint: Not all information may be necessary.

b. Use the above information from a service company and from a merchandiser to compute net income.

a. Goods available for sale Cost of goods sold Gross profit b. Net income for Krug Service Company Net income for Kleiner Merchandising Company