Dear Michi,

Thank you for your seventh message.  My comments follow.

Sincerely,

Prof. Sue Garreis

 

《 Homework 》

1. What is the format for an American Income Statement?

　　→ 　The format for an American Income Statement is revenue less cost of goods sold equals gross margin. And its gross margin less operating expenses equals net income(Loss).

Correct!


2. Use your words to tell me how to calculate cost of goods sold. Please do not use any numbers.

　　→　The Cost of Goods Sold is calculated beginning inventory plus purchases less ending inventory equals cost of goods sold.

Correct!


3. Did Beach Toys use LIFO or FIFO to calculate the cost of goods sold?

　　→　Beach Toys uses FIFO to calculate the cost of goods sold.

Correct!


4. Does the purchase price of inventory rise or fall for Beach Toys, Inc?

　　→　The purchase price of the inventory of Beach Toys, Inc falls.

The purchase price of inventory for Beach Toys, Inc rises.

The first purchase was $100.  The second purchase was $120.  The third purchase was $150.  The purchase prices increase each time.


5. Which inventory method (LIFO or FIFO) is better for Beach Toys, Inc to use?　"Better" means "results in lower income tax."

　　→　Beach Toys, Inc had better use LIFO if it wants lower income tax.

Correct!

6. How easy was this lesson for you?

　　→　The accounting was somewhat hard.

　　→　The English was about right.

　　→　Finding and using the linked web pages was somewhat easy.

Thank you for the feedback.


《Vocabulary - Income Statement (Part 1) 》

English Japanese

Thank you for the vocabulary list.

I'm waiting for your reply.

Sincerely, yours

Michi


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