Question

Reimel Furniture Company, Inc. incurred the following costs during 20x2.

Direct material used $174,000
Direct labor 324,000
Manufacturing overhead 180,000

During 20x2, products costing $120,000 were finished, and products costing $132,000 were sold on account for $195,000. There were no purchases of raw material during the year. The beginning balances in the firm's inventory accounts are as follows:

Raw material $227,000
Work in process 18,000
Finished goods 30,000

Prepare balance sheet.

Answer 1

Reimel Furniture Company

Partial Balance sheet

As at December 31 20x2

Current assets

Cash…………..……………………………………………………………………XXX

Accounts receivable…………………………………………………………XXX

Inventory

Raw materials……………………………………………………$53, 000

Work-in-process………………………………………………..$576, 000

Finished goods…………………………………………………. $18, 000

Step-by-step explanation:

Before we can prepare the balance sheet, we nee to prepare the general journal T-Accounts for the following accounts in order to arrive at the closing balances.

• Raw materials inventory

• Work in process inventory

• Wages payable

• Finished goods inventory

• Manufacturing overhead

• Sales revenue

• Cost of goods sold

• Accounts receivable

Preparing these T Accounts will help us to arrive the closing balances for the asset accounts that for the balance sheet.

Raw materials inventory

Opening balance 227, 000 Work in process inventory 174, 000

Closing balance 53, 000

Work-in-process inventory

Opening balance 18, 000

Raw materials inv 174, 000

Wages payable 324, 000

Manufacturing overhead 180, 000 Finished goods 120, 000

Closing balance 576, 000

Wages payable

Work-in-process 324, 000 Profit and loss 324, 000

Finished goods Inventory

Opening balance 30, 000

Work-in-process 120, 000 Cost of goods sold 132, 000

Closing balance 18, 000

Manufacturing Overhead

Profit and loss 180, 000 Work-in-process 180, 000

Sales Revenue

Profit and loss 195, 000 Accounts receivable 195, 000

Accounts Receivable

Sales revenue 195, 000

Cost of Goods Sold

Finished goods 132, 000 Profit and loss

Reimel Furniture Company

Partial Balance sheet

As at December 31 20x2

Current assets

Cash…………..……………………………………………………………………XXX

Accounts receivable…………………………………………………………XXX

Inventory

Raw materials……………………………………………………$53, 000

Work-in-process………………………………………………..$576, 000

Finished goods…………………………………………………. $18, 000

Reimel Furniture Company

Partial Income Statement

For the year ending December 31, 20x2

Sales revenue……………………………………………………………………………$195, 000

Less: Cost of goods sold……………………………………………………………$132, 000

Gross Margin……………………………………………………………………………$ 63, 000