Question 2 (50 marks) The following data were taken from the records of Wendy Ma

Question

Question 2 (50 marks) The following data were taken from the records of Wendy Manufacturing Company for the year ended 31 December 2017. as Raw material inventory 1/1/2017 Raw material inventory 31/12/2017 Finished goods inventory 1/1/2017 Finished goods inventory 31/12/2017 Work in process inventory 1/1/2017 Work in process inventory 31/12/2017 Direct labor Indirect labor Accounts receivable Factory insurance Fact Freight-in/transportation-in on raw materials purchased Factory utilities 60,000 160,500 122,000 350,000 630,400 50,600 30,500 650,300 43,300 94,000 34.300 33.000 21,700 56,700 ory machinery depreciation

Explanation / Answer

Solution :

a Cost of goods manufactured Schedule Particulars Amount Amount Raw Material Opening Raw material Inventory            160,500 Add : Raw Material purchases            278,800 Add :Freight in on purchases              21,700 Less : Closing RM inventory          (122,000) Total raw materials used for production                 339,000 Direct Labor                 650,300 Factory Overheads Factory insurance              34,300 Factory Machinery Depreciation              33,000 Factory Utilities              56,700 Indirect Labor              43,300 Factory Supervision              75,000 Repairs factory Machinery                 3,300                 245,600 Total Components of cost for the year             1,234,900 Add : Opening Work in process inventory                   50,600 Less : Closing Work in process inventory                 (30,500) Total cost of goods avaibable for sale             1,255,000 Add : Opening Finished goods inventory                 350,000 Less : Closiong Finished goods inventory               (630,400) Total cost of goods Manufactured for the year                 974,600 b Statement of Profit and Loss through Gross Profits Amount Amount Sales        1,654,000 Less Returns              (8,900) Net sales revenue        1,645,100 Less cost of good Manufactured          (974,600) (from above statement) Gross Profit                 670,500 Less :Office Salary Expenses                 (30,800) Net Profit                 639,700 c Current assets portion under the statement of financial position as of 31st Dec 2017 Current Assets Amount Amount Cash                   60,000 Inventory Raw Materials            122,000 Work in process              30,500 Finished Goods            630,400                 782,900 Accounts Receivable                   94,000 Total current Assets                 936,900

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