Problem 14-4A Ending inventory computation and evaluation C4

Nazaros Boot Company makes specialty boots for the rodeo circuit. At the beginning of the year, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in raw materials inventory. During the year, the company purchased 35,000 additional heels at $8 each and manufactured 16,600 pairs of boots.

Required

1. Determine the unit and dollar amounts of raw materials inventory in heels at year-end.

Analysis Component

2. Compute the dollar amount of working capital that can be reduced at year-end if the ending heel raw material inventory is cut by half.

Problem 14-5A Inventory computation and reporting C4 P1

Shown here are annual financial data taken from two different companies.

	Music WorldRetail	Wave-BoardManufacturing
Beginning inventory
Merchandise	$200,000
Finished goods		$500,000
Cost of purchases	300,000
Cost of goods manufactured		875,000
Ending inventory
Merchandise	175,000
Finished goods		225,000
Table Summary: In the table, the costs are listed in column 1. The following cells are blank: Rows 1 and 6: columns 2, 3 Rows 2, 4, and 7: column 3 Rows 3, 5, and 8: column 2

Required

1. Compute the cost of goods sold section of the income statement for the year for each company.

Check (1) Wave-Boards cost of goods sold, $1,150,000

2. Identify the inventory accounts and describe where each is reported on the income statement and balance sheet for both companies.