Work backwards to find missing amounts (Learning Objective 5)

Smooth Sounds manufactures and sells a new line of MP3 players. Unfortunately, Smooth Sounds suffered serious fire damage at its home office. As a result, the account¬ ing records for October were partially destroyed—and completely jumbled. Smooth Sounds has hired you to help figure out the missing pieces of the accounting puzzle.

Assume that Smooth Sounds’ raw materials inventory contains only direct materials.

Requirement Find the following amounts:

a. Cost of goods sold in October

b. Beginning raw materials inventory

c. Ending finished goods inventory (Hint: You may find Exhibits 2-15 and 2-16 helpful.)

Work in process inventory, October 31............. $ 1,500 Finished goods inventory, October 1.. 4,300 Direct labor in October............. 3,000 Purchases of direct materials in October. 9,000 Work in process inventory, October 1................... 0 Revenues in October..... 27,000 Gross profit in October......... 12,000 Direct materials used in October.... 8,000 Raw materials inventory, October 31 3,000 Manufacturing overhead in October...... 6,300