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papisreyna718 · Jul 19, 2009, 03:11 PM

I can not seem to get this started even when I have read the chapter. Can someone help. I am truly not understanding this work. I need to prepare a statement of cost of goods manufactured and then a cost of goods sold section of the income statement. This is how the problem is laid out:
Sales... $75,000
Materials inv. (Jan 1)... 22,000
Work in process inv. (Jan 1)... 20,000
Finished goods inv. (Jan 1)... 30,000
Materials purchased... 21,000
Direct labor cost... 18,000
Factory overhead (including $1,000 of
Indirect materials used and $3,000 of
Indirect labor cost... 12,000
Selling & administrative exp... 10,000
Inventories @ Jan 31:
Materials... 25,000
Work in process... 24,000
Finished goods... 32,000

This is how its laid out but honestly I have no idea what to do or how to even start it. Not asking for the work to be done for me, I just do not understand how to start this out or for that matter which are the parts that I am needing to do the work. Is there anyone that can help me with getting this done or to understand what it is that I am asked to do... I am so lost, it is unreal. Thank you.:confused:

morgaine300 · Jul 20, 2009, 10:33 PM

Here's an example:
http://www.pages.drexel.edu/~cpa22/Acct%20331/Ch02%20SS%202%20-%20331%2012e.pdf

The difficulty is that it's a little hard to explain without actually doing it for you. Plus it depends on where you're lost: just with the statements or with some other areas. Like, do you know the flow of these accounts? (i.e. your materials, wip and finished goods accounts) Do you know what 3 costs go into WIP? If you're lost on that stuff, it'll be difficult to understand how the statement goes together. Copying an example won't help you understand that stuff.