Question

The financial records for the Harrison Manufacturing Company have been destroyed in a fire. The following information has been obtained from a separate set of books maintained by the cost accountant. The cost accountant now asks for your assistance in computing the missing amounts.
Direct Materials Inventory
Beg. Bal. 8,200 ? Transferred Out
Purchases ?
End. Bal. 6,600
Cost of Goods Sold
59,000
Work-in-Process Inventory
Beg. Bal. 7,700 ? Transferred Out
Materials 18,400
Labor 13,700
Overhead 8,200
End. Bal. ?
Finished Goods Inventory
Beg. Bal. ? ? Transferred Out
Transferred in 39,700
End. Bal. 4,400
What is the value of the ending Work-in-Process inventory balance?
a. $4,400.
b. $0.
c. $8,200.
d. $8,300.

Answer 1

Answer:

d. $8,300.

Explanation:

             Direct Materials

Beginning     8,200

Purchases   *16,800

Requisitions             18,400

Ending          6,600

We solve for purchases:

6,600 + 18,400 - 8,200 = 16,800

WIP Inventory

Beginning                7,700

Materials                18,400

Labor                     13,700

Overhead               8,200

Transferred Out                 39,700*

Ending                    8,300

The transferred-out from WIP inventory is the transferred-in for Finished Goods