Question

Applying the Cost of Goods Sold Model

The following amounts were obtained from Stanwick Company's accounting records.

	2019			2020
Net sales		$382,400			$420,640
Cost of goods sold:
Beginning inventory	$36,800			(d)
Purchases	(a)			296,700
Goods available for sale	(b)			(e)
Ending inventory	42,060			(f)
Cost of goods sold		(c)			295,390
Gross margin		$111,760			(g)

Required:

Compute the missing amounts. Input your answers as positive numbers.

	2019			2020
Net sales		$382,400			$420,640
Cost of goods sold:
Beginning inventory	$36,800			$fill in the blank 1
Purchases	fill in the blank 2			296,700
Goods available for sale	fill in the blank 3			fill in the blank 4
Ending inventory	42,060			fill in the blank 5
Cost of goods sold		fill in the blank 6			295,390
Gross margin		$111,760			$fill in the blank 7

Answer 1

	2019			2020
Net sales		382400			420640
Cost of goods sold:
Beginning inventory	36800			42060
Purchases	275900			296700
Goods available for sale	312700			338760
Ending inventory	42060			43370
Cost of goods sold		270640			295390
Gross margin		111760			125250

Goods available for sale = Beginning Inventory + Purchases

Cost of goods sold = Goods available for sale - Ending inventory

Gross margin = Net sales - Cost of goods sold