TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABCCorporation completely destroying the work-in-progress inventory. There was no damage to either theraw materials or finished goods inventories. A physical verification taken after the flood revealed thefollowing valuations.Raw Materials.62,000Work-in-ProgressFinished Goods1,19,000The inventory on Jan. 1, 2006 consicted of the following :Raw MaterialsWork-in-Progress30,0001,00,0001,40,000Finished Goods2,70,00025% of sales. The sales for the first six months of 2006 were1,15,000. Direct labour costs for this period wereA review of the books and records disclosed that the gross profit margin historically approximated3,40,000. Raw material purchases80,000 and manufacturing overhead haswerehistoricálly been 50% of direct labour.Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement ofcost and profit.

Answered: Image /qna-images/answer/17fe4cbf-cdd5-45aa-ad1c-72e498ce06bc.jpg

TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC Corporation completely destroying the work-in-progress inventory. There was no damage to either the raw materials or finished goods inventories. A physical verification taken after the flood revealed the following valuations. Raw Materials .62,000 Work-in-Progress Finished Goods 1,19,000 The inventory on Jan. 1, 2006 consicted of the following : 30,000 1,00,000 1,40,000 Raw Materials Work-in-Progress Finished Goods 2,70,000 A review of the books and records disclosed that the gross profit margin historically approximated 3,40,000. Raw material purchases 80,000 and manufacturing overhead has 25% of sales. The sales for the first six months of 2006 were 1,15,000. Direct labour costs for this period were were historicálly been 50% of direct labour. Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of cost and profit.

TROBLEM 2. On June 30, 2006 a flash flood damaged the warchouse and factory of ABC Corporation completely destroying the work-in-progress inventory. There was no damage to either the raw materials or finished goods inventories. A physical verification taken after the flood revealed the following valuations. Raw Materials .62,000 Work-in-Progress Finished Goods 1,19,000 The inventory on Jan. 1, 2006 consicted of the following : 30,000 1,00,000 1,40,000 Raw Materials Work-in-Progress Finished Goods 2,70,000 A review of the books and records disclosed that the gross profit margin historically approximated 3,40,000. Raw material purchases 80,000 and manufacturing overhead has 25% of sales. The sales for the first six months of 2006 were 1,15,000. Direct labour costs for this period were were historicálly been 50% of direct labour. Compute the cost of work-in-progress inventory lost at June 30, 2006 by preparing a statement of cost and profit.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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