Question

3. The Cloverleaf Corporation began business on January 1, 2016. The following transactions took place during the year (Assume all transactions involve cash): 1.)    Acquired $5,000 of capital from the owners. 2.)    Purchased $4,000 of direct raw materials. 3.)    Used $3,500 of direct raw materials. 4.)    Paid production workers $2,500. 5.)    Paid $1,500 for manufacturing overhead. (Applied and actual overhead are the same.) 6.)    Started and completed 2,000 units of WIP inventory 7.)    Sold 1,500 units for $8 each. 8.)    Paid $2,500 for selling and administrative expenses. The amount of raw materials inventory reported on the balance sheet at December 31, 2016 would be:

Answer 1

​​​​​​Answer :- Calculation of the amount of Raw Materials inventory reported on the balance sheet at December 31,2016 :-

Raw material inventory = Purchase of Raw material - Used of Raw material

Raw material inventory = $4,000 - $3,500

Raw material inventory = $500

So the amount of Raw Material inventory reported on the balance sheet at December 31,2016 would be = $500.

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