Question

The following balances are from the accounts of Tappan Parts: January 1 (Beginning) Direct materials inventory Work-in-process inventory Finished goods inventory December 31 (Ending) $ 24,600 29,400 7,300 32,600 5,000 Direct materials used during the year amount to $46,400 and the cost of goods sold for the year was $53,200. Required: Prepare a cost of goods sold statement. 32,600 TAPPAN PARTS Cost of Goods Sold Statement For the Year Ended December 31 Beginning work-in-process inventory Manufacturing costs: Direct materials: Beginning inventory $ 21,900 Purchases Materials available Less: Ending inventory 24,600 Direct materials used Other manufacturing costs Total manufacturing costs Total costs of work-in-process Less: Ending work-in-process Cost of goods manufactured Beginning finished goods inventory Finished goods available for sale Less: Ending finished goods inventory Cost of goods sold

Answer 1

TAPPAN PARTS
Cost of Goods Sold Statement
For the year ended December 31
Beginning WIP Inventory			$          32,600
Manufacturing costs :
Beginning Inventory	$          21,900
Purchases (Refer Note 1)	$          49,100
Material available (Refer Note 1)	$          71,000
Less : Ending Inventory	$          24,600
Direct Materials Used		$          46,400
Other manufacturing costs (Refer Note 6)		$            5,900
Total manufacturing costs (Refer Note 5)			$          52,300
Total cost of WIP (Refer Note 4)			$          84,900
Less : Ending WIP			$          29,400
Cost of goods manufactured (Refer Note 3)			$          55,500
Beginning finished goods inventory			$            5,000
Finished goods available for sale (Refer Note 2)			$          60,500
Less : Ending fininished goods inventory			$            7,300
Cost of Goods Sold			$          53,200
Refer below for workings :
Note 1 :
Purchase of Direct Material = Direct Materials used + Closing Inventory - Opening Inventory
Purchase = 46,400 + 24,600 - 21,900 = 49,100 $
Hence Materials available = Purchases + Opening Inventory = 21,900 + 49,100 = 71,000 $
Note 2 :
Finished goods available for sale = Cost of goods sold + Ending Inventory = 53,200 + 7,300 = 60,500 $
Note 3 :
Cost of goods manufactured = Finished goods available for sale - Opening Inventory = 60,500 - 5,000 = 55,500 $
Note 4 :
Tota Cost of WIP = Cost of goods manufactured + Closing Inventory = 55,500 + 29,400 = 84,900 $
Note 5 :
Total manufcturing costs = Total cost of WIP - Opening WIP = 84,900 - 32,600 = 52,300 $
Note 6 :
Other manufacturing costs = Total manufacturing costs - Direct material used = 52,300 - 46,400 = 5900 $