“Below are data for two companies: Company A Company BBeginning balances:Merchandise Inventory $9,600Finished Goods Inventory $14,800Ending balances:Merchandise Inventory 13,900Finished Goods Inventory 12,900Net Purchases 156,500Cost of Goods Manufactured 211,000”,”Requirement 1. Define the three business types: service, merchandising, and manufacturing.Service – Does not sell products. They sell time, skills, and knowledge.Merchandising – Resells products previously bought from suppliers.Manufacturing – Uses labor, equipment, supplies, and facilities to convert raw materials into new finished products. Requirement 2. Based on the data given for the two companies, determine the business type of each one.Company A is a merchandising company and Company B is a manufacturing company.Requirement 3. Calculate the cost of goods sold for each company. Begin by calculating the cost of goods sold for Company A.Beginning Merchandise Inventory $9,600Purchases 153,500Cost of Goods Available for Sale 163,100Ending Merchandise Inventory (12,700)Cost of Goods Sold $150,400Company BBeginning Finished Goods Inventory $15,000Cost of Goods Manufactured 211,000Cost of Goods Available for Sale 226,000Ending Finished Goods Inventory (11,900)Cost of Goods Sold $214
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