Part 1: Complete the partial income statement for Pinnacle, a merchandising business.

Part 2: Complete the partial income statement for Slope, a manufacturing business.

Part 3: Explain the difference between calculating cost of goods sold for a merchandising and a manufacturing business.

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Instructions:

Indicate what inventory accounts are used for each and on what financial statement and in which section these inventory accounts would be included.

Transcribed Image Text:

Financial data at December 31, 2005: Pinnacle Slope Board Ret Ianufacturing Beginning inventory Merchandise S 150,000 Finished goods S 300,000 Cost of purchases Cost of goods manufactured Ending inventory 250.000 586,000 Merchandise 100,000 Finished goods 200,000 Check figure: (1) Slope Board's cost of goods sold S 686,000