Question

Amazon has the following information for the month of March.

Purchases $417,500
Materials inventory, March 1 83,300
Materials inventory, March 31 91,500
Direct labor 117,000
Factory overhead 102,000
Work in process, March 1 55,600
Work in process, March 31 77,900
Finished goods inventory, March 1 65,400
Finished goods inventory, March 31 82,200
Sales 1,167,000
Sales and administrative expenses 371,000

Prepare a (a) schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the inventory section of the balance sheet.

Answer 1

Answer:

(a) schedule of cost of goods manufactured

Raw Materials                             409,300

Direct labor                                  117,000

Factory overhead                       102,000

Add Opening Work in process   55,600

Less Closing Work in process   (77,900)

Cost of goods manufactured    606,000

(b) an income statement for the month ended March 31

Sales                                                                                      1,167,000

Less Cost of Sales

Opening Finished goods inventory              65,400

Add Cost of Goods Manufactured              606,000

Less Closing Finished goods inventory      (82,200)        (589,200)

Gross Profit                                                                           577,800

Sales and administrative expenses                                    (371,000)

Net Income                                                                           206,800

(c) the inventory section of the balance sheet

Materials inventory                91,500

Work in process                     77,900

Finished goods inventory     82,200

Total                                      251,600

Explanation:

(a) schedule of cost of goods manufactured

Materials Used in Production = Opening Materials inventory + Purchases - Closing Materials inventory

                                                 = 83,300 + 417,500 - 91,500

                                                 = 409,300

schedule of cost of goods manufactured

Raw Materials                             409,300

Direct labor                                  117,000

Factory overhead                       102,000

Add Opening Work in process   55,600

Less Closing Work in process   (77,900)

Cost of goods manufactured    606,000

(b) an income statement for the month ended March 31

Sales                                                                                      1,167,000

Less Cost of Sales

Opening Finished goods inventory              65,400

Add Cost of Goods Manufactured              606,000

Less Closing Finished goods inventory      (82,200)        (589,200)

Gross Profit                                                                           577,800

Sales and administrative expenses                                    (371,000)

Net Income                                                                           206,800

(c) the inventory section of the balance sheet

Materials inventory                91,500

Work in process                     77,900

Finished goods inventory     82,200

Total                                      251,600