Response to the following problem:
The following information is available for Sassafras Company.
|
|
January 1,2010
|
2010
|
December 31, 2010
|
|
Raw materials inventory
|
$ 21,000
|
|
$30,000
|
|
Work in process inventory
|
13,500
|
|
17,200
|
|
Finished goods inventory
|
27,000
|
|
21,000
|
|
Materials purchased
|
|
$150,000
|
|
|
Direct labor
|
|
200,000
|
|
|
Manufacturing overhead
|
|
180,000
|
|
|
Sales
|
|
900,000
|
|
Instructions
(a) Compute cost of goods manufactured.
(b) Prepare an income statement through gross profit.
(c) Show the presentation of the ending inventories on the December 31, 2010, balance sheet.
(d) How would the income statement and balance sheet of a merchandising company be different from Sassafras's financialstatements?