Practice Problem 2
The following data have been prepared for a manufacturer:
- beginning inventory, raw materials: $15,000
- beginning inventory, work in process: $18,000
- beginning inventory, finished goods: $20,000
- ending inventory, raw materials: $25,000
- ending inventory, work in process: $29,000
- ending inventory, finished goods: $35,000
- purchases of raw materials: $65,000
- indirect materials: $6,000
- direct labor: $62,000
- indirect labor: $9,000
- depreciation expense for production equipment: $9,000
- other factory overhead costs: $3,000
- total number of units produced during the year: 76,000
Complete the cost of goods sold section of the income statement. The answer to Practice Problem 1 will be helpful.
Solution
Cost of Goods Sold
| Beginning finished goods inventory | $20,000 |
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|
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| Cost of goods manufactured | $133,000 |
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|
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| Cost of goods available for sale | $153,000 |
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|
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| Ending finished goods inventory | $35,000 |
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|
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| Cost of goods sold |
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| $118,000 |
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