Question

Please show all work and do both statements

The following information is available for Booker Company for 2019 (all numbers in dollars Beginning Finished Goods Beginning Materials Beginning WIP Direct Labor Ending Finished Goods Ending Materials Ending WIP Manufacturing Overhead Purchases (materials) Sales 1,375,200 856,000 725,000 836,700 1,145,670 871,350 697,300 2,579,220 10,025,000 Note: gross profit is 40% of sales Required: Prepare a statement of cost of goods sold and a statement of cost of goods

Answer 1

Cost of goods sold = $10,025,000 - 40% = $6,015,000

Purchases = Cost of goods sold - (Beginning Material - Ending material + Direct labor + Manufacturing overhead + Beginning WIP - Ending WIP + Beginning finished goods - Ending finished goods)

= $6,015,000 - ($856,000 - $871,350 + $836,700 + $2,579,220 + $725,000 - $697,300 + $1,375,200 + $1,145,670)

= $2,357,200

Cost of goods manufactured:

Particulars	Amount
Beginning material	$856,000
Add: Purchases	$2,357,200
(Less): Ending material	($871,350)
Direct material used in production	$2,341,850
Add: Direct labor	$836,700
Add: Manufacturing overhead	$2,579,220
Total manufacturing cost	$5,757,770
Add: Beginning WIP	$725,000
(Less): Ending WIP	($697,300)
Cost of goods manufactured	$5,785,470

Cost of goods sold:

Particulars	Amount
Cost of goods manufactured	$5,785,470
Add: Beginning Finished goods	$1,375,200
(Less): Ending finished goods	($1,145,670)
Cost of goods sold	$6,015,000