Question

Rockeagle Corporation began fiscal year 2018 with the following balances in its inventory accounts:

Raw Materials	$	30,000
Work in Process		45,000
Finished Goods		14,000

  

During the accounting period, Rockeagle purchased $125,000 of raw materials and issued $124,000 of materials to the production department. Direct labor costs for the period amounted to $162,000, and manufacturing overhead of $24,000 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $306,000 to produce were completed and transferred to Finished Goods Inventory. Goods costing $301,000 were sold for $400,000 during the period. Selling and administrative expenses amounted to $36,000.

Required

Determine the ending balance of each of the three inventory accounts that would appear on the year-end balance sheet.

Prepare a schedule of cost of goods manufactured and sold and an income statement.

Prepare a schedule of cost of goods manufactured and sold.

ROCKEAGLE CORPORATION Schedule of cost of goods manufactured and sold For the year ended 2018 Beginning raw materials inventory Purchases Raw materials available 0 Ending raw materials inventory Raw materials used 0 Labor Manufacturing overhead Total manufacturing costs 0 Beginning work in process inventory Total work in process inventory 0 Ending work in process inventory Cost of goods manufactured 0 Beginning finished goods inventory Goods available for sale 0 Ending finished goods inventory Cost of goods sold $0 Prepare an income statement. ROCKEAGLE CORPORATION Income Statement For the year ended 2018 0 $0

Answer 1

Raw material Inventory:
Beginning balance			30000
Add: Purchase			125000
Less: Issue to production			-124000
Ending balanc eof RM			31000
WIP Inventory
Beginning Inventory of Wip					45000
Add: Current cost of manufacturing
Material issued				124000
Direct wages				162000
OH applied				24000
Total current cost of production					310000
Total cost of goods manufacturing					355000
Less: Cost of goods manufactured					306000
WIP ending inventory					49000
Finished Goods inventory:
Beginning Inventory of FG				14000
Add: Cost of goods manufactured				306000
Cost of goods available ffor sale				320000
Less: Cost of good ssold				301000
Ending inventory of FG				19000
Schedule of Cost of goods manufactured:
Beginning Inventory of Rm				30000
AdD: Purchase				125000
RM available				155000
Less: Ending inventory				-31000
Raw material issued				124000
Labour cost				162000
OH applied				24000
Total Manufacturing cost				310000
Add: Beginning inventory of Wip				45000
Total WIP inventory				355000
Less: Ending inventory of WIP				49000
Cost of goods manufactured				306000
Add: Beginning Inventory of FG				14000
Total cost of goods available for sale				320000
Less: Ending inventory of FG				19000
Cost of good ssold				301000
Income Statement:
Sales revenue				400000
Less: Cost of goods sold				301000
Gross Margin				99000
Less: Selling and admin expenss				36000
Net Operating income				63000