AB114-Accounting For Merchandising Businesses


You are the CEO of a newly incorporated retail firm that will sell DKNY® and Tommy Hilfiger® along with other designer clothing. Your job is to set up an accounting information system to maintain appropriate records needed in the eventual preparation of financial statements. Certain principles should be followed in the development of an accounting information system. Identify and explain each of the principles.


Computers have become a staple in the lives of most people. There are many companies that provide computers on the market. Assume that you are planning to purchase a new laptop for your classes, work and home use. Please go to the websites of two major United States computer manufacturers such as Hewlett Packard®, Acer®, Apple®, etc. and make a selection.

Once you have made your selection, please complete the following items and questions:

1.Compare the following items for your selections:


b.Delivery Charges

c.Financing Options




g.Installation Offered

h.Recycling of Old Components Offered

2.What are some factors that can impact the gross profit of a merchandise company?

3.One item that can help investors understand the relationship between net sales and net profits is the gross profit rate. The calculation explanation for this financial ratio is found on page 225 of the textbook. Find the financial information needed to calculate the gross profit rate for your two selected companies.

a.Which company has the better ratio?

b.Why do you think this is the case?


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