Certain information about the statement of cost of goods manufactured and the income statement for the year ended December 31, 2019, for Paul’s Production, Inc., is given below:
Beginning inventory of finished goods, 105 percent of ending inventory
Work in process inventory, January 1, 95 percent of ending inventory
Net income.............................................................................................................$130,000
Raw materials inventory, January 1...........................................................................25,000
Direct labor costs.....................................................................................................100,000
Manufacturing overhead, 120 percent of direct labor costs
Work in process inventory, December 31..................................................................22,000
Finished goods inventory, December 31...................................................................35,000
Raw materials inventory, December 31.....................................................................27,000
Net purchases of raw material.................................................................................179,000
Net sales.................................................................................................................650,000

INSTRUCTIONS
Prepare a statement of cost of goods manufactured and an income statement for the year.
Analyze: Did total inventories for the business increase or decrease during the year? By what amount?