Reference no: EM132743365

The balances of Iki Company are presented below:

Year 2018

Raw materials $200,000

Work in Process $340,000

Finished Goods $815,000

Year 2019

Raw materials $185,000

Work in Process $354,000

Finished Goods $780,000

The allowance for inventory write-down for the finished goods as of December 31, 2018 is at $15,000.

Audit notes:

1. The entity purchased $1,200,000 worth of raw materials for 2019. 80% of the purchases were on account.
2. $25,000 worth of raw materials are still in transit as of December 31, 2019. It was included in the ending inventory but was only recorded as purchase in January 5, 2020. The term is FOB shipping point.
3. Factory overhead for the year total $840,000, which is 20% more than the direct labor.
4. Estimated selling price of the finished goods is $800,000 and the estimated cost to sell the goods is at 4% of its selling price.

Problem 1: How much is the cost of goods sold for 2019?