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    Prepare Schedule of Cost of Goods Manufactured

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    The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just completed year.

    Sales 1,150
    Raw materials inventory, beginning 15
    Raw materials inventory, ending. 40
    Purchases of raw materials.. 150
    Direct labor.. 250
    Manufacturing overhead. 300
    Administrative expenses.. 500
    Selling expenses... 300
    Work in process inventory, beginning. 100
    Work in process inventory, ending.. 150
    Finished goods inventory, beginning... 80
    Finished goods inventory, ending 120

    Use the above data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated?

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    Solution Summary

    The expert prepares a schedule of costs of goods manufactured. The raw materials inventory beginning are examined.