Question

Instruction Zoe Corporation has the following information for the month of March: Purchases $92,000 Materials inventory, March 1 6,000 8,000 Materials inventory, March 31 Direct labor Factory overhead 25,000 37,000 Work in process, March 1 22,000 23,500 Work in process, March 31 Finished goods inventory, March 1 21,000 Finished goods inventory, March 31 30,000 257,000 Sales Sales and administrative expenses 79,000 Required: Prepare (a) a statement of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) the inventory section of the balance sheet. Refer to the Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. "Less" or "Plus" will automatically appear if it is required. You will not need to enter colons (:) on the financial statements.

Answer 1

a)

Statement of Cost of goods manufactured

Direct materials:
Beginning raw material inventory	6,000
Add: Purchases of raw material	92,000
Total raw materials available	98,000
Less: Ending raw materials inventory	- 8,000
Raw materials used in production		90,000
Direct labor		25,000
Factory overhead		37,000
Total manufacturing cost		152,000
Add: Beginning work in process inventory		22,000
		174,000
Less: Ending work in process inventory		- 23,500
Cost of goods manufactured		150,500

b)

Income statement

Sales revenue		257,000
Cost of goods sold
Finished goods, beginning	21,000
Cost of goods manufactured	150,500
Cost of goods available for sale	171,500
Finished goods, ending	- 30,000
Cost of goods sold		- 141,500
Gross profit		115,500
Sales and administrative expense		- 79,000
Net operating income		36,500

c)

Balance sheet (partial)

Assets
Current assets
Inventories
Raw material	8,000
Work in process	23,500
Finished goods	30,000

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