Question

me financial records for the Harrison Manufacturing Company have been destroyed in a fire. The following information has been obtained om a separate set of books maintained by the cost accountant. The cost accountant now asks for your assistance in computing the missing mounts Direct Materials Inventory Beg. Bal. 9,700 Transferred Out Purchases ? Cost of Goods Sold 74,000 Transferred Out End. Bal. 8,100 Work-in-Process Inventory Beg. Bal. 9,200 Materials 21,400 Labor 15,200 Overhead 9,700 End. Bal. Finished Goods Inventory Beg. Bal. Transferred Out Transferred in End. Bal. 41,200 5,900 What is the value of the beginning Finished Goods Inventory? Multiple Choice SO

Answer 1

Based on the information available in the question, we can calculate the Beginning Finished goods inventory as follows:-

Cost of goods sold = Beginning Finished Goods inventory + Cost of Goods manufactured - Ending Finished goods inventory

Let Beginning finished goods inventory be "x"

$74,000 = x + $41,200 - $5,900

$74,000 = x + $35,300

x = $74,000 - $35,300

x = $38,700

Based on the calculation above, the correct answer is Option B - $38,700.

Option A, Option C and Option D are incorrect per the calculation above.

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