Jefferson Corporation was started on January 1, 2014. The company incurred the f

Question

Jefferson Corporation was started on January 1, 2014. The company incurred the following transactions during the year (Assume all transactions involve cash):

1) Acquired $2,200 of capital from the owners.

2) Purchased $480 of direct raw materials.

3) Used $320 of these direct raw materials in the production process.

4) Paid production workers $520 cash.

5) Paid $320 for manufacturing overhead (applied and actual overhead are the same).

6) Started and completed 250 units of inventory.

7) Sold 170 units at a price of $6 each.

8) Paid $160 for selling and administrative expenses.

The amount of raw material inventory on the balance sheet at the end of the accounting period would be:

Explanation / Answer

Solution:

Calculation of the amount of raw material inventory on the balance sheet at the end of the accounting period:

Amount of beginning inventory of raw material

$0

Add: Purchased Amount Raw Material Inventory during the year

$480

Less: Raw Material Inventory Amount Used in production process during the year

($320)

Ending Raw Material Inventory Amount

$160

The amount of raw material inventory on the balance sheet at the end of the accounting period would be $160

Amount of beginning inventory of raw material

$0

Add: Purchased Amount Raw Material Inventory during the year

$480

Less: Raw Material Inventory Amount Used in production process during the year

($320)

Ending Raw Material Inventory Amount

$160

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.