Question

Reimel Furniture Company, Inc. incurred the following costs during 20x2.

Direct material used	$	174,000
Direct labor		320,000
Manufacturing overhead		160,000

During 20x2, products costing $121,000 were finished, and products costing $132,000 were sold on account for $195,000. There were no purchases of raw material during the year. The beginning balances in the firm’s inventory accounts are as follows:

Raw material	$	225,000
Work in process		18,000
Finished goods		30,000

1. Prepare T-accounts to show the flow of costs through the company’s manufacturing accounts during 20x2.

2. Prepare a partial balance sheet (just inventory) and a partial income statement to reflect the information given above.

Answer 1

Closing balance of finished goods =(30,000+121,000-132,000)=19,000

opening balance Manufacturing C.H. Ale 0 work in progress & the 160,000 closing balance 160,000 Saless Opening balance Accounts receivable 195,000 Closing balance 1195,000 Accounts receivables the wish Opening balance ce ano M5,000 closing belovce 195,000 Sales the 2) Partial. Balence sheet. Inventory Raw material work in progress 51,000 551,000 14,000 tinished goods Pasdial Income statement- Sales 195,000 (.Coul of goods sold G32.000) Gross Meagain 63,000