Chapter F5 Power notes Accounting for Merchandising Businesses Learning objectives 1. Nature of Merchandising Business 2a. Accounting for Purchases 2b. Accounting for Sales C5 2c. Transportation Costs 2d merchandise transactions 3. Merchandising Chart of Accounts 4. Merchandising Income Statement 5. Merchandising Accounting Cycle 6. Financial Analysis and Interpretation c5-1
C5 - 1 Learning Objectives Power Notes 1. Nature of Merchandising Business 2a. Accounting for Purchases 2b. Accounting for Sales 2c. Transportation Costs 2d. Merchandise Transactions 3. Merchandising Chart of Accounts 4. Merchandising Income Statement 5. Merchandising Accounting Cycle 6. Financial Analysis and Interpretation Chapter F5 Accounting for Merchandising Businesses C5
Chapter F5 Power notes I Accounting for Merchandising Businesses Slide Power Note Topics 3 Nature of Merchandising Businesses 6. Inventory Costs and Relationships 8. Perpetual Inventory Systems 13. Merchandising Transactions 25 .Merchandising Chart of Accounts 27.Merchandising Financial Statements 34. Ratio of net sales to Assets Ev Note: To select a topic, type the slide# and press Enter c5-2
C5 - 2 • Nature of Merchandising Businesses • Inventory Costs and Relationships • Perpetual Inventory Systems • Merchandising Transactions • Merchandising Chart of Accounts • Merchandising Financial Statements • Ratio of Net Sales to Assets Slide # Power Note Topics 3 6 8 13 25 27 34 Chapter F5 Power Notes Accounting for Merchandising Businesses Note: To select a topic, type the slide # and press Enter
Merchandising and Inventory Merchandising involves selling inventory Inventory is usually an im portant asset Inventory must be accounted for periodically or perpetually Traditional periodic method is often being replaced by perpetual inventory accounting c5-3
C5 - 3 Merchandising and Inventory Merchandising involves selling inventory Inventory is usually an important asset Inventory must be accounted for periodically or perpetually Traditional periodic method is often being replaced by perpetual inventory accounting
Income Statement Comparison Service Business Fees earned $150,000 Operating expenses 120,000 Net income 53000020%0 avenues Merchandising Business Sales revenue $600,000 Cost of mdse. sold 450000 Gross profit $150,000 Operating expenses 120,000 Net income S 30, 000< 5% of revenues c5-4
C5 - 4 Income Statement Comparison Fees earned $150,000 Operating expenses 120,000 Net income $ 30,000 Service Business Sales revenue $600,000 Cost of mdse. sold 450,000 Gross profit $150,000 Operating expenses 120,000 Net income $ 30,000 Merchandising Business 20% of revenues 5% of revenues
Income Statement Comparison Service Business Fees earned $150,000 Operating expenses 120,000 Net income 53000020%0 avenues Merchandising Business Sales revenue $600,000 Cost of mdse. sold 450,000< 75% of revenues Gross profit $150,000 Operating expenses 120,000 Net income S 30, 000< 5% of revenues c5-5
C5 - 5 Income Statement Comparison Fees earned $150,000 Operating expenses 120,000 Net income $ 30,000 Service Business Sales revenue $600,000 Cost of mdse. sold 450,000 Gross profit $150,000 Operating expenses 120,000 Net income $ 30,000 Merchandising Business 20% of revenues 5% of revenues 75% of revenues