What is difference between a merchandising company income statement and manufacturing company income statement?

 Merchandising companies do not calculate the raw materials placed in production or cost

of goods manufactured.

 Merchandisers purchase goods from suppliers instead of manufacturing goods. The cost

of these purchases from suppliers is often called net purchases in the income statement, in

contrast to cost of goods manufactured in a manufacturer’s income statement. The net

purchases line consists of purchases, purchases returns and allowances, purchases

discounts, and freight in.

 Merchandisers do not use the schedule of cost of goods manufactured (and related

schedule of raw materials placed in production).

 Merchandisers use an account called merchandise inventory, or simply inventory, instead

of finished goods inventory. This reflects that merchandisers do not produce goods.