Question

In: Accounting

1. When the ending balance in materials inventory is $40,000, the cost of goods manufactured is...

1. When the ending balance in materials inventory is $40,000, the cost of goods manufactured is $ and net income is $.

2. When the ending balance in materials inventory is $35,000, the cost of goods manufactured is $ and net income is $.

3. When the ending balance in materials inventory is $30,000, the cost of goods sold is $ and net income is $.

4. When the ending balance in materials inventory is $32,500, the cost of goods sold is $ and net income is $.

Solutions

Expert Solution

Ending inventory: Ending inventory is a line item of Cost of Goods sold manufactured. if the ending inventory is more thant the cost of goods sold will be less and gross revenue will increase . Similarly when the opening inventory is more than Cost of Goods sold is more and revenue is less in that period with that amount.

So as per the above answer is as below

  1. Ending inventory balance is $ 40,000 it will decrease the Cost of Goods Sold with $40,000 and net income will increase the with same amount i.e. $ 40,000
  2. Ending inventory balance is $ 35,000 it will decrease the Cost of Goods Sold with $35,000 and net income will increase the with same amount i.e. $ 35,000
  3. Ending inventory balance is $ 30,000 it will decrease the Cost of Goods Sold with $30,000 and net income will increase the with same amount i.e. $ 30,000
  4. Ending inventory balance is $ 32,500 it will decrease the Cost of Goods Sold with $32,500 and net income will increase the with same amount i.e. $ 32,500

ekkarill92 answered 1 year ago
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