Question

Zoe Corporation has the following information for the month of March: Purchases $92,000 Materials inventory, March 1 6,000 Materials inventory, March 31 8,000 Direct labor 25,000 Factory overhead 37,000 Work in process, March 1 22,000 Work in process, March 31 23,500 Finished goods inventory, March 1 21,000 Finished goods inventory, March 31 30,000 Sales 257,000 Sales and administrative expenses 79,000 Required: Prepare (a) a statement of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) the inventory section of the balance sheet. Refer to the Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. “Less” or “Plus” will automatically appear if it is required. You will not need to enter colons (:) on the financial statements.

Answer 1

a) Statement of Cost of goods manufactured

Direct material used
Material inventory, March 1	6000
Material purchase	92000
Material available for use	98000
Less: Material inventory, March 31	-8000	90000
Direct labor		25000
Factory overhead		37000
Total manufacturing cost		152000
Beginning work in process		22000
Total Cost of work in process		174000
Less: Ending work in process		-23500
Cost of goods manufactured		150500

b) Income statement

Sales		257000
Cost of goods sold
Beginning finished goods	21000
Cost of goods manufactured	150500
Cost of goods available for sale	171500
Less: Ending finished goods	-30000	141500
Gross profit		115500
Selling and administrative expense		79000
Operating income		36500

3) Inventory section of balance sheet

Current assets
Finished goods	30000
Work in process	23500
Material	8000
Total	61500