Hector p wastrel a careless employee left some combustible

Reference no: EM13596819

Hector P. Wastrel, a careless employee, left some combustible materials near an open flame in Salter Company's plant. The resulting explosion and fire destroyed the entire plant and administrative office. Justin Quick, the company's controller, and Constance Trueheart, the operations manager, were able to save only a few bits of information as they escaped from the roaring blaze.

"What a disaster," cried Justin. "And the worst part is that we have no records to use in filing an insurance claim.""I know," replied Constance. "I was in the plant when the explosion occurred, and I managed to grab only this brief summary sheet that contains information on one or two of our costs. It says that our direct labor cost this year totaled $180,000 and that we purchased $290,000 in raw materials. But I'm afraid that doesn't help much; the rest of our records are just ashes."

"Well, not completely," said Justin. "I was working on the year-to-date income statement when the explosion knocked me out of my chair. I instinctively held onto the page I was working on, and from what I can make our, our sales to date this year totaled $1,200,000 and our gross margin was 40% of sales. Also, I can see that our goods available for sale to consumers totaled $810,000 at cost."

"Maybe we're not so bad off after all," exclaimed Constance. "My sheet says that prime cost totaled $410,000 so far this year and that manufacturing overhead is 70% of conversion cost. Now if we just had some information on our beginning inventories."
"Hey, look at this," cried Justin. "It's a copy of last year's annual report, and it shows what our inventories were when this year started. Let's see, raw materials was $18,000, work in process was $65,000 and finished goods was $45,000.

"Super," yelled Constance. "Let's go to work."To file an insurance claim, the company must determine the amount of cost in its inventories as of the date of the fire. You may assume that all materials used in production during the year were direct materials.

Required:

Determine the amount of cost in the Raw Materials, Work in Process, and Finished Goods inventory accounts as of the date of the fire. (Hint: One way to proceed would be to reconstruct the various scheduled and statements that would have been affected by the company's inventory accounts during the period.)

Reference no: EM13596819

Questions Cloud

Magic shoe offers a trade discount of 25 if the list price : 84 payment for merchandise sold on credit for 100 subject to 210 n30 was received within the discount period - 98 was

On may 31 2008 james logan company had a cash balance per : on may 31 2008 james logan company had a cash balance per books of 6559.53. the bank statement from farmers state bank

Benzoyl chloride c6h5cocl reacts with water to form benzoic : benzoyl chloride c6h5cocl reacts with water to form benzoic acid c6h5cooh and hydrochloric acid. this first-order

The percentage of fica-medicare multiplied by taxable : 1 the entry to record the employers payroll taxes would include a a credit to state and federal unemployment tax

Hector p wastrel a careless employee left some combustible : hector p. wastrel a careless employee left some combustible materials near an open flame in salter companys plant. the

Which of the following ground state ions isare : which of the following ground state ions isare diamagnetic?i. fe 2 ii. zn 2 iii. cu 1 iv. ni2 v. v3a i iv only b i iii

Which of these ground-state gaseous ions has the largest : which of these ground-state gaseous ions has the largest number of unpaired electrons?a v2b cr 2c fe 3d co 2e ni

The payroll register includes sections for recordingboth : 1 the payroll register includes sections for recording a assets liabilities equity revenues and expenses. b gross pay

If overhead is applied on the basis of dlhs what : blaine corp. makes floats for mardi gras in new orleans. the companys fiscal year ends on march 31. on january 1 2010

User Account

All Pages