Question

Sunland Company has the following account balances at year end:Office supplies $ 3800Raw materials 27500Work-in-process 59500Finished goods 97500Prepaid insurance 5400What amount should Sunland report as inventories in its balance sheet?1. $188300.2. $97500.3. $101300.4. $184500.

Answer 1

4) $184500.

Step-by-step explanation:

Sunland Company has the following account balances at year end:

• Office supplies $3,800
• Raw materials $27,500
• Work-in-process $59,500
• Finished goods $97,500
• Prepaid insurance $5,400

inventories = raw materials + work in progress + finished goods = $27,500 + $59,500 + $97,500 = $184,500

both office supplies and prepaid insurance are assets, but they are not part of the company's inventory.