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Required information Exercise 3-31 Manufacturing Cost Flows (LO 3-2, 3-5, 3-6) [The following information applies to the...

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Accounting

Required information

Exercise 3-31 Manufacturing Cost Flows (LO 3-2, 3-5, 3-6)

[The following information applies to the questionsdisplayed below.]

Reimel Furniture Company, Inc. incurred the following costs during20x2.

Direct material used$173,000
Direct labor321,000
Manufacturing overhead170,000


During 20x2, products costing $120,000 were finished, and productscosting $132,000 were sold on account for $195,000. There were nopurchases of raw material during the year. The beginning balancesin the firm’s inventory accounts are as follows:

Raw material$225,000
Work in process16,000
Finished goods28,000

Exercise 3-31 Part 1

Required:

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

Raw material inventory

work in process inventory

wages payable

manufacturing overehad

finished goods inventory

sales revenue

accounts receivable

Cost of goods sold

2. Prepare a partial balance sheet and apartial income statement to reflect the information givenabove.

Answer & Explanation Solved by verified expert
4.2 Ratings (854 Votes)

Raw materials inventory Work in process inventpry
Beg.Bal 225,000 Beg.Bal 16,000
173,000 used DM 173,000
DL 321,000
end bal 52,000 MOH 170,000
120,000 finished
end bal 560,000
Wages payable Manufacturing overhead
Beg.bal 0 beg bal 0
321,000 WIP 170,000 WIP
end bal 321000 end bal 170000
finished goods inventory Sales revenue
Beg bal 28,000 Beg.bal 0
WIP 120,000 195,000 A/r
132,000 COGS
End bal 16,000 End bal 195000
Account receivable cost of goods sold
Beg.bal 0 Beg bal 0
sales 195,000 finished 132,000
end bal 195000 End bal 132000
Partial Balance Sheet
As of December 31,20X2
Inventory:
Raw material 52,000
Work in process 560,000
Finished goods 16,000
Partial income statement
Sales revenue 195,000
less: cost of goods sold 132,000
Gross Margin 63,000

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