Question

Current Attempt in Progress "Of all the times this hard drive could crash, it had to be now,"Betty cried. "How can I finish the June financial reports without all the information? I knew I should have backed up the disk last night before I left work.” News of the disaster traveled quickly through the office, and people began to stop by her cubicle to offer their help. Mark was the first to the rescue. “It might not be as bad as you think, Betty. I have the financial reports from May right here. According to the balance sheet, we had a total inventory of $100,000 at the end of May. And I remember that the Finished Goods Inventory was 80% of that amount." "I just finished the inventory counts last night," Donald chimed in from across the hall. “According to my tally sheets, we finished June with $40,000 in Direct Materials Inventory, $21,000 in Work in Process Inventory, and $45,000 in Finished Goods Inventory. This was a 25% increase from the balances in Direct Materials Inventory at the end of May. I bet with a little more investigative work, we can get all the numbers you need to complete the reports." Helen called from Payroll to tell Betty that the company had paid a total of $23,000 for direct labor during June. Juan, the billing supervisor, e-mailed Betty that the company had sent out invoices to customers totaling $291,000. Betty knew that the overhead rate was 200% of direct labor costs. She also knew that the company priced its product using a 100% markup on the cost of goods sold. Armed with all this information, she sat down to reconstruct the inventory accounts for June. (21) (1) Calculate the begininng finished goods. (Round answer to the nearest dollar amount, e.g. 5,275.)

Answer 1

Details We have:	Particulars	Amt in$
1	Total Inventory at the end of May	1,00,000.00
2	FG inventory 80% of Total Inventory May	80,000.00
3	Closing DM Inventory June	40,000.00
4	Closing WIP Inventory June	21,000.00
5	Closing FG Inventory June	45,000.00
6	Increase in DM Inventory June by 25% from May	25%
7	Labour Cost paid During June	23,000.00
8	Sales Turnover During June	2,91,000.00
9	OH rate is 200% of DL Cost	200%
10	Product Pricing at 100% mark up COGS	100%
Answers:
1	Beginning of Finished Goods	80,000.00
	80% of Total Inventory of May end of $ 100,000/-
2	Beginning of Direct Raw Materials	32,000.00
	June DM Inventory Increased by 25% of May End DM Inventory
3	Beginning of Work In Process	-12,000.00
	Loss of Inventory
4	Cost of Goods Sold	1,45,500.00
	100% mark up on COGS for Sell Price, Total Turnover $ 291,000/-
5	Cost of Goods Manufactured June	99,500.00
	Excluding Overhead cost which is 200% of DL Cost, which comes to (23000*200%)= 46,000
6	Direct Materials Used	76,500.00
	Excluding Direct Labour cost during June 23000, balance is Direct Materials Used COGM
7	Amount of Purchases	84,500.00
	Opening DM June	32000	a
	Amount of Purchases During Month (Balancing Figure)	84500	b
	Total of Above	116500	(a+b)=c
	Material Used During June	76500	d
	Balance of DM at end of June	40000	(c-d)=e
8	Direct Labour for the Month	23,000.00
	Labour cost is incurred during month at the same time
9	Amount of Applied Overhead	46,000.00