1. Slopes Ski Shop's special journals in Exhibits 7-6 through 7-10 (pp. 387 - 396) provide the manager with much of the data needed for preparing the financial statements. Slopes uses the perpetual inventory system, so the amount of cost of goods sold is simply the ending balance in that account. The manager needs to know the business's gross margin for November. Compute the gross margin.

2. Suppose Slopes used the periodic inventory system. In that case, the business must compute cost of goods sold by the following formula:

Cost of goods sold:

Beginning inventory ..........................................$ 3,885

+ Net purchases ................................................XXX

= Cost of goods available for sale ...........................XXX

− Ending inventory ............................................(4,249)

= Cost of goods sold .........................................$ XXX

Perform this calculation of cost of goods sold for Slopes. Does this computation of cost of goods sold agree with your answer to Requirement 1?