Question

Baird Corporation began fiscal Year 2 with the following balances in its inventory accounts. Raw Materials $ 55,900 Work in Process 82,500 Finished Goods 27,300 During the accounting period, Baird purchased $238,700 of raw materials and issued $249,100 of materials to the production department. Direct labor costs for the period amounted to $322,900, and manufacturing overhead of $46,900 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $611,000 to produce were completed and transferred to Finished Goods Inventory. Goods costing $600,100 were sold for $801,900 during the period. Selling and administrative expenses amounted to $71,500. 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.

Answer 1

Ending Raw Materials $ 45,500

Ending Work in Process $ 90,400

Ending Finished Goods $ 38,200

Net Profit $ 130,300

Step-by-step explanation:

There are two ways to find the ending balances . One is through T accounts and the other through Cost of Goods Manufactured and Sold

Statement. In Cost of Goods Manufactured and Sold Statement we simply put the values in the correct order as given and find the required balances by the reverse operations.

Baird Corporation

Schedule of Cost of Goods Manufactured and Sold

Opening Raw Materials $ 55,900

Add Raw Materials purchased $238,700

Less Ending Raw Materials $ 45,500

Raw materials Used $249,100 (given)

(Opening Raw Materials+Raw Materials purchased)-Raw materials Used=Ending Raw Materials

Direct labor costs $322,900,

Manufacturing overhead $46,900

Total Manufacturing Costs $618,900

Total Manufacturing Costs=Raw materials Used+Direct labor costs+Manufacturing overhead

Add Opening Work in Process 82,500

Cost OF Goods Available For Manufacture $ 701,400

Cost OF Goods Available For Manufacture=Total Manufacturing Costs + Opening Work in Process

Less Ending Work in Process $ 90,400

Cost OF Goods Manufactured $611,000 (given)

Ending Work in Process=Cost OF Goods Available For Manufacture-Cost OF Goods Manufactured

Add Opening Finished Goods 27,300

Cost Of Goods Available for Sale $ 638,300

Cost Of Goods Available for Sale =Cost OF Goods Manufactured +Opening Finished Goods

Less Ending Finished Goods $ 38,200

Cost Of Goods Sold $600,100 (given)

Ending Finished Goods = Cost Of Goods Sold -Cost Of Goods Available for Sale

Baird Corporation

Schedule of Cost of Goods Manufactured and Sold

Opening Raw Materials $ 55,900

Add Raw Materials purchased $238,700

Less Ending Raw Materials $ 45,500

Raw materials issued $249,100 (given)

Direct labor costs $322,900,

Manufacturing overhead $46,900

Total Manufacturing Costs $618,900

Add Opening Work in Process 82,500

Cost OF Goods Available For Manufacture $ 701,400

Less Ending Work in Process $ 90,400

Cost OF Goods Manufactured $611,000 (given)

Add Opening Finished Goods 27,300

Cost Of Goods Available for Sale $ 638,300

Less Ending Finished Goods $ 38,200

Cost Of Goods Sold $600,100 (given)

Baird Corporation

Income Statement

Sales $801,900

Less Cost OF Goods Sold $600,100 ( calculated as above)

Gross Profit $ 201,800

Less Selling and administrative expenses $71,500

Net Profit $ 130,300