Question

Date Saved: December 3, 2019 Time Saved: 4:07 PM Problem 2 (15 marks) The following accounts and balances pertain to Xenon Company for the year ended December 31, 2018. Cost of Goods Available for Sale $2,465,000 Depreciation Expense – Manufacturing Equipment 162,000 Direct Labor 950,000 Finished Goods Inventory, January 1, 2018 413,000 Factory Insurance 100,000 Gross Profit 3,526,000 Indirect Labor 185,000 Indirect Materials 210,000 Raw Materials Available for Use M. 769,000 Raw Materials Inventory, January 1, 2018 54,000 Av Raw Materials Inventory, December 31, 2018 M 230,000 Sales 5,650,000 Work in Process Inventory, December 31, 2018 165,000 Required: Use the space provided on the following pages to: a. Prepare a schedule of cost of goods manufactured for Xenon Company for the year ended December 31, 2018. b. Prepare a schedule of cost of goods sold for Xenon Company for the year ended December 31, 2018.

Answer 1

First we can calculate missing figures from available informations

Sales	$   5,650,000
Less: gross profit	$   3,526,000
Cost of goods sold	$   2,124,000

Cost of goods available for sale	$   2,465,000
Less: Cost of goods sold	$   2,124,000
Finished goods inventory, December 31, 2018	$      341,000

Cost of goods available for sale	$   2,465,000
Less: Finished goods inventory, January 1, 2018	$      413,000
Cost of goods manufactured	$   2,052,000

Cost of goods manufactured	$   2,052,000
Less: Total manufacturing cost	$   1,936,000
Add: Work in process inventory, December 31, 2018	$      165,000
Work in process inventory, January 1, 2018	$      281,000

1.

Xenon Company
Schedule of cost of goods manufactured
For the year ended December 31, 2018
Raw material, January 1, 2018	$     54,000
Add: Materials purchased	$   715,000
Material available for use	$   769,000
Less: Raw material, December 31, 2018	$   230,000
Less: Indirect material	$   210,000
Direct material used		$      329,000
Add: Direct labor		$      950,000
Add: Manufacturing overhead
Depreciation expense - Manufacturing equipment	$   162,000
Factory insurance	$   100,000
Indirect labor	$   185,000
Indirect material	$   210,000
Total manufacturing overhead		$      657,000
Total manufacturing cost		$   1,936,000
Add: Work in process inventory, January 1, 2018		$      281,000
Less: Worki in process inventory, December 31, 2018		$      165,000
Cost of goods manufactured		$   2,052,000

2.

Xenon Company
Schedule of cost of goods sold
For the year ended December 31, 2018
Finished goods inventory, January 1, 2018	$      413,000
Add: Cost of goods manufactured	$   2,052,000
Cost of goods available for sale	$   2,465,000
Less: Finished goods inventory, December 31, 2018	$      341,000
Cost of goods sold	$   2,124,000

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