Determine the cost of flash drives

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Reference no: EM132933005

Question - Gelinas Computer Company was organized on May 1. On that date, the company purchased 42,000 USB flash drives to be sold with personal computers, each pre-loaded with the company's product information brochures. The front of the USB flash drives displays the company's name and an attractive corporate logo. Each USB flash drive cost Gelinas $6.

During May, 31,500 USB flash drives were drawn from the raw materials inventory account. Of these, 600 were taken by the sales manager to an important sales meeting with prospective customers and handed out as advertising. The remaining USB flash drives drawn from inventory were sold by bundling them with units of the company's product that were being manufactured during May. Of the units of product that were bundled with the USB flash drive during May, 80% were completed and transferred from work in process to finished goods. Of the units completed during the month, 70% were sold and shipped to customers.

Required -

1. Determine the cost of flash drives that would be in each of the following accounts at May 31:

Raw materials

Work in Process

Finished Goods

Cost of Goods Sold

Advertising Expense

2. Specify whether each of the above accounts would appear on the balance sheet or on the income statement at May 31.

Raw materials

Work in Process

Finished Goods

Cost of Goods Sold

Advertising Expense

Reference no: EM132933005

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