Accounting Activity:

Falcon's Fruit Stand
Cost of Merchandise Sold

 

Objective:

This lesson is a way to teach the abstract concept of Cost of Merchandise Sold in a more concrete format.

Supplies Needed:
3 snack Ziploc bags for each group

4 oz. Box of Runts for each group

Preliminary Planning:

Prior to the lesson, label and fill the bags as follows for each group-

 

January 1 Inventory

 

Various Runts-approx. 2/3 of the box

 

Purchases

 

Various Runts-approx. 1/3 of the box

 

Merchandise Sold

 

Empty

Procedure:

Students move into groups of four and complete the work sheet below. The teacher facilitates each step as follows-

  1. Give each group the January 1 inventory bag and have students count and calculate January 1 inventory.
  2. Give each group a Purchases bag and have students count and calculate Purchases and Total Cost of Merchandise Available for Sale.
  3. Have students put a handful of Runts in the empty Merchandise Sold bag.
  4. Have students count and calculate the remaining Runts and record the December 31 Inventory.
  5. Calculate Cost of Merchandise Sold
  6. Count and calculate the Runts in the Merchandise Sold bag to prove the accuracy of their work.

Falcon's Fruit Stand

Cost of Merchandise Sold

January 1 Inventory

 

 

 

 

 

 

 

 

 

 

Apples

 

 

 

 

 

 

X

$2

=

 

Oranges

 

X

$3

=

 

Strawberries

 

X

$5

=

 

Limes

 

X

$1

=

 

Bananas

 

X

$4

=

 

 

January 1 Inventory =

 $

 

Purchases

 

 

 

 

Apples

 

 

X

$2

=

 

Oranges

 

X

$3

=

 

Strawberries

 

X

$5

=

 

Limes

 

X

$1

=

 

Bananas

 

X

$4

=

 

 

+ Purchases

$

Total Cost of Merchandise Available for Sale (Inventory + Purchases) = $

Falcon's Fruit Stand

Cost of Merchandise Sold

December 31 Inventory

 

 

 

 

 

 

 

 

 

 

Apples

 

 

 

 

 

 

X

$2

=

 

Oranges

 

X

$3

=

 

Strawberries

 

X

$5

=

 

Limes

 

X

$1

=

 

Bananas

 

X

$4

=

 

 

- December 31 Inventory =

 $

 Total Cost of Merchandise Available for Sale - December 31 Inventory = $

( This amount of the Cost of Merchandise Sold)

Proof of Merchandise Sold

 

 

 

 

Apples

 

 

X

$2

=

 

Oranges

 

X

$3

=

 

Strawberries

 

X

$5

=

 

Limes

 

X

$1

=

 

Bananas

 

X

$4

=

 

 

Cost of Merchandise Sold

$

Do your amounts match????

This activity was presented by Dana Simpson West of Northwest High School at MBEA Conference Summer 2000