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    Folk Exam Questions - Chapter 1: Solution

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    amrin jannat
    The document contains 4 exam questions and solutions regarding Davis Corporation's financial statements for the year. [1] It calculates that the cost of raw materials used in production was $360,000. [2] It determines that the cost of goods manufactured was $2,160,000. [3] It finds that the cost of goods sold was $2,000,000. [4] Finally, it shows that the net income for the year was $800,000.

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    Folk Exam Questions - Chapter 1: Solution

    Uploaded by

    amrin jannat
    90 views3 pages
    The document contains 4 exam questions and solutions regarding Davis Corporation's financial statements for the year. [1] It calculates that the cost of raw materials used in production was $360,000. [2] It determines that the cost of goods manufactured was $2,160,000. [3] It finds that the cost of goods sold was $2,000,000. [4] Finally, it shows that the net income for the year was $800,000.

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    The document contains 4 exam questions and solutions regarding Davis Corporation's financial statements for the year. [1] It calculates that the cost of raw materials used in production was $360,000. [2] It determines that the cost of goods manufactured was $2,160,000. [3] It finds that the cost of goods sold was $2,000,000. [4] Finally, it shows that the net income for the year was $800,000.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    90 views3 pages

    Folk Exam Questions - Chapter 1: Solution

    Uploaded by

    amrin jannat
    The document contains 4 exam questions and solutions regarding Davis Corporation's financial statements for the year. [1] It calculates that the cost of raw materials used in production was $360,000. [2] It determines that the cost of goods manufactured was $2,160,000. [3] It finds that the cost of goods sold was $2,000,000. [4] Finally, it shows that the net income for the year was $800,000.

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    Folk Exam Questions - Chapter 1

    1. The following data (in thousands of dollars) have been taken from the accounting
    records of Davis Corporation for the just completed year:

    Administrative expenses $ 600


    Direct labor 800
    Finished goods inventory, beginning 480
    Finished goods inventory, ending 640
    Manufacturing overhead 920
    Purchases of raw materials 480
    Raw materials inventory, beginning 160
    Raw materials inventory, ending 280
    Sales 3,960
    Selling expenses 560
    Work in process inventory, beginning 280
    Work in process inventory, ending 200

    What was the cost of the raw materials used in production during the year (in
    thousands of dollars)?

    Solution:

    Raw materials inventory, beginning $160


    Purchases of raw materials 480
    Less raw materials inventory, ending (280)
    Raw materials used in production $360

    2. The following data (in thousands of dollars) have been taken from the accounting
    records of Davis Corporation for the just completed year:

    Administrative expenses $ 600


    Direct labor 800
    Finished goods inventory, beginning 480
    Finished goods inventory, ending 640
    Manufacturing overhead 920
    Purchases of raw materials 480
    Raw materials inventory, beginning 160
    Raw materials inventory, ending 280
    Sales 3,960
    Selling expenses 560
    Work in process inventory, beginning 280
    Work in process inventory, ending 200
    What was the cost of goods manufactured (finished) for the year (in thousands of
    dollars)?

    Solution:

    Work in process inventory, beginning $ 280


    Raw materials used in production (calculated above) 360
    Direct labor 800
    Manufacturing overhead 920
    Total manufacturing costs 2,360
    Less: work in process inventory, ending (200)
    Cost of goods manufactured $2,160

    3. The following data (in thousands of dollars) have been taken from the accounting
    records of Davis Corporation for the just completed year:

    Administrative expenses $ 600


    Direct labor 800
    Finished goods inventory, beginning 480
    Finished goods inventory, ending 640
    Manufacturing overhead 920
    Purchases of raw materials 480
    Raw materials inventory, beginning 160
    Raw materials inventory, ending 280
    Sales 3,960
    Selling expenses 560
    Work in process inventory, beginning 280
    Work in process inventory, ending 200

    What was the cost of goods sold for the year (in thousands of dollars)?

    Solution:

    Finished goods inventory, beginning $ 480


    Cost of goods manufactured (calculated above) 2,160
    Less finished goods inventory, ending (640)
    Cost of goods sold $2,000

    4. The following data (in thousands of dollars) have been taken from the accounting
    records of Davis Corporation for the just completed year. (Note that this is the same
    data as that provided for the question above.)

    Administrative expenses $ 600


    Direct labor 800
    Finished goods inventory, beginning 280
    Finished goods inventory, ending 640
    Manufacturing overhead 920
    Purchases of raw materials 480
    Raw materials inventory, beginning 160
    Raw materials inventory, ending 280
    Sales 3,960
    Selling expenses 560
    Work in process inventory, beginning 280
    Work in process inventory, ending 200

    What was the net income for the year (in thousands of dollars)?

    Solution:

    Sales $3,960
    Cost of goods sold (calculated above) 2,000
    Gross profit 1,960
    Operating expenses:
    Administrative expenses $600
    Admin
    istrativ
    e
    expens
    es
    Selling expenses 560 (1,160)
    Net income $ 800

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