the statement of cash flows for the current year ended December 31 using the direct method.

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Chapter 12, Problem 6PB

1.

To determine

To prepare: the statement of cash flows for the current year ended December 31 using the direct method.

2.

To determine

To interpret: The statement of cash flows of Company DIC.

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Grass Reed Bayou is a bottling company in The Netherlands. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $320,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $ 382,000Direct labor 313,000Factory overhead 650,700The January 1 balances of inventory accounts are shown below. Materials-all direct $ 64,000Work-in-process 41,400Finished goods 25,600The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The cost of goods manufactured during the year is: