Question

V Cost of goods sold statement. The following information has been taken from the records of Maxwell Company: Inventories: January 1 December 31 Finished goods.. $ 5,000 S 7,000 Work in process. 15.000 9,000 Materials. .... 10,000 12,000 Materials purchases ...... $100,000 Direct labor.... 200,000 Freight in ..... 3,000 Sales salaries and expenses 25,000 Other factory expenses.. 4,000 Freight out...... 2,000 Factory Insurance........... 12,500 Depreciation-machinery ...... 40,000 Purchase returns and allowances. 5,000 Sales ..........** ** 350,000 Purchase discounts ...... 800 Sales discounts ..... 2,000 Required: Prepare a cost of goods sold statement for the year.

Answer 1

Schedule of Cost of goods manufactured

Direct materials:
Beginning raw material inventory	10,000
Add: Purchases of raw material	100,000
Freight in	3,000
Total raw materials available	113,000
Purchase returns and allowance	- 5,000
Purchase discount	- 800
Less: Ending raw materials inventory	- 12,000
Raw materials used in production		95,200
Direct labor		200,000
Factory overhead:
Other factory expenses	4,000
Depreciation - Machinery	40,000
factory insurance	12,500
Total factory overheads		56,500
Total manufacturing cost		351,700
Add: Beginning work in process inventory		15,000
		366,700
Less: Ending work in process inventory		- 9,000
Cost of goods manufactured		$357,700

                              

Schedule of cost of goods sold

Beginning finished goods inventory	5,000
Add: Cost of goods manufactured	357,700
Cost of goods available for sale	362,700
Less: Ending finished goods inventory	- 7,000
cost of goods sold	355,700

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