Question

In comparing and contrasting the income statements of a merchandiser and a manufacturer, the item "net...


In comparing and contrasting the income statements of a merchandiser and a manufacturer, the item net purchases on a mercha
In comparing and contrasting the income statements of a merchandiser and a manufacturer, the item "net purchases" on a merchandiser's income statement is replaced by what item on a manufacturer's income statement? O Cost of goods manufactured. O Work-in-process. Raw materials. O None of these Finished goods.
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Answer #1

Option (a) is correct

Manufacturer's income statement has "Cost of goods manufactured" in place of "Net purchases" . Reason for this is that a manufacturer is involved into manufacturing activities. While calculating the gross margin, we need to deduct cost of goods manufactured from the sales revenue in a manufacturer's income statement.

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