Question

Exercise #3: A Manufacturing Company has the following data at June 30, 2018:

            Raw materials inventory, June 1                                                   $ 13,800

            Work in process inventory, June 1                                                    18,100

            Finished goods inventory, June 1                                                      43,500

            Total manufacturing costs                                                                 510,000

            Sales                                                                                                           590,000

            Work in process inventory, June 30                                                 30,400

            Finished goods inventory, June 30                                                    50,200

            Raw materials inventory, June 30                                                     18,000

Instructions

1.       Using the above data, prepare an income statement through gross profit for the month of June.
2.       Prepare the current asset section of the balance sheet showing the presentation of the June 30 inventories.

Answer 1

WORKING NOTE
PARTICULARS	AMOUNT	AMOUNT
BEGINNIG INVENTORY OF RAW MATERIAL	13800
ADD : PURCHASE	XXXXXX
INVENTORY AVAILABLE FOR USE	13800+XXXX
LESS : CLOSING INVENTORY OF RAW MATERIAL	-18000
TOTAL DIRECT MATERIAL USED		XXXXX-4200
DIRECT LABOUT		0
FACTORY OVEHEAD		0
TOTAL MANUFACTIURING COST		510000
SUPPOSE PURCHASE = X
X-4200= 510000
X= 510000+4200
X= 514200
INCOME STATEMENT FOR A MANUFACTURING COMPANY
PARTICULARS	AMOUNT	AMOUNT
SALES REVENUE		590000
BEGINNIG INVENTORY OF RAW MATERIAL	13800
ADD : PURCHASE	514200
INVENTORY AVAILABLE FOR USE	528000
LESS : CLOSING INVENTORY OF RAW MATERIAL	-18000
TOTAL DIRECT MATERIAL USED		510000
DIRECT LABOUT		0
FACTORY OVEHEAD		0
TOTAL MANUFACTIURING COST	510000	510000
ADD : OPENING INVENTORY OF WIP	18100
TOTAL COST OF WORK IN PROCESS INVENTORY	528100
LESS : CLOSING INVENTORY OF WIP	-30400
TOTAL COST OF GOODS MANUFACTURES	497700	497700
ADD : BEGINNNIG INVENTORY OF FINISHED GOODS	43500
COST OF GOODS MANUFACTURED	541200
LESS CLOSING INVENTORY OF FINISHED GOODS	-50200
COST OF GOODS SOLD	491000	491000
GROSS PROFIT		99000
(SALES -COST OF GOODS SOLD)
(590000-491000)
CURRENT ASSETS AS ON 30 JUNE
PARTICULARS	AMOUNT
RAW MATERIAL	18000
WORK IN PROGRESS	30400
FINISHED GOODS	50200
TOTAL INVENTORY	98600