Question

Smiley Manufacturing Company has the following account balances at year end:

Office supplies $ 3,000
Raw materials 21,000
Work-in-process 32,000
Finished goods 46,000
Prepaid insurance 5,000
What amount should Smiley report as inventories in its balance sheet?
a.$46,000.
b.$99,000.
c.$104,000.
d.$78,000.

Answer 1

Smiley Manufacturing Company should report $99,000 as inventories in its balance sheet.

Step-by-step explanation:

To calculate the amount Smiley Manufacturing Company should report as inventories in its balance sheet, you need to sum up the balances of the accounts related to inventory. In this case, the relevant accounts are: raw materials, work-in-process, and finished goods. The sum of these account balances is $21,000 (raw materials) + $32,000 (work-in-process) + $46,000 (finished goods) = $99,000.