The following information is available for Sassafras Company.

Instructions

(a) Compute cost of goods manufactured.

(b) Prepare an income statement through gross profit.

(c) Show the presentation of the ending inventories on the December 31, 2010, balance sheet.

(d) How would the income statement and balance sheet of a merchandising company be different from Sassafras’s financial statements?

Transcribed Image Text:

December 31, 2010 January 1, 2010 2010 Raw materials inventory Work in process inventory Finished goods inventory Materials purchased Direct labor Manufacturing overhead Sales $ 21,000 13,500 27,000 $30,000 17,200 21,000 $150,000 180,000 900,000