Reference no: EM132983113

Local Furniture Ltd (LFL) incurred the following production costs during the financial year 2019:

Direct material $348,000

Direct labour 648,000

Manufacturing overhead applied 360,000

Product costing $240,000 were finished, and product costing $264,000 were sold on credit for $390,000. LFL purchased $50,000 worth of raw materials during the year.

The inventory account balances at the beginning of the year were as follows:

Raw materials $454,000

Work in process 36,000

Finished goods 60,000

Required:

Problem a) Prepare the ledger accounts to show the flow of costs through LFL's manufacturing accounts during the year.

Problem b) Prepare a partial balance sheet and a partial statement to reflect the information given above.