Finished goods inventory 11 20000 Finished goods inventory 1

Finished goods inventory, 1/1 20,000 Finished goods inventory, 12/31 21300 Indirect labor 1,600 Indirect materials used 1,500 Purchases of direct materials 8,000 Sales $21.800 Utilities expense, factory 900 Work in process inventory, 1/ 800 Work in process inventory, 123 10,000 ANSWER (MUST SHOW ALL WORK IN ORDER TO RECEIVE ALL MARKS): Question#2 The following data( have been taken from the accounting records of DAVISON Corporation for the just completed year Direct labor $140 Finished goods inventory, beginning S170 Finished goods inventory, ending S160 Manufacturing overhead 310 Purchases of raw materials $80 Raw materials inventory, beginning S 40 Raw materials inventory, ending S80 Sales $790 Selling expenses $30 Work in process inventory, beginning S 60 Work in process inventory, ending S 40 Required: (a.) Prepare a Schedule of Cost of Goods Manufactured in good form. (b.) Compute the Cost of Goods Sold (c.) Using data from above as needed, prepare a GAAP- compliant Income Statement in good form. (MUST SHOW ALL WORK IN ORDER TO RECEIVE ALL MARKS) Barbara Wonkers is a Controller at a company that builds software and hardware products. The firm does projects with clients paying several hundred thousand to millions of dollars for the products it creates. They turn over their nventory six months. It is

Solution

a) Cost of Raw Materials consumed = Beginning Raw Materials Inventory + Purchases of raw materials - Closing Raw Materials Inventory

= $40,000 +$80,000 -$80,000

= $40,000

b)

c) Income statement for Davison Corporation:

Cost of Raw Materials Consumed	40,000
Direct Labor	140,000
Manufacturing Overhead	310,000
Total Manufacturing Costs	490,000
Add : Work in Progress inventory, beginning	60,000
Less : Work in Progress inventory, ending	(40,000)
Cost of Goods Manufactured in Good Form	510,000