Handed back tests today. Did great on the test, but lack of homework is dragging me down.Getting guidelines for our first group project. It’s tracking a simulated company for one month, using a program called Peachtree.
To get to Peachtree, I have to use the computer lab downstairs, and log in under ID FBC_peachtree.
Back to merchandising operations.
The income statement for a merchandising operation has four factors.
- Net sales, or sales revenue
- Subtract the cost of goods sold. This gives you the gross margin.
- Subtract the operating expenses from the gross margin.
- The result is the net income.
Net sales is equal to gross sales, minus any returns, allowances, or sales discounts.
Cost of goods sold is normally determined by adding your starting inventory for a period to the net purchases for that period, to determine the cost of goods available for sale. The ending inventory for the month is subtracted from this figure, giving you the cost of goods sold. Note that under this system, goods lost or stolen in a period are included in the cost of goods sold. Freight-In is included in the cost of goods available for sale.