Adepartment store uses a perpetual inventory system. at year-end, it shows a balance in the merchandise inventory account of $2 million. assuming that the inventory records have been maintained properly, a year-end physical inventory a : will confirm that a perpetual inventory system was used correctly. b : will most likely indicate more than $2 million in merchandise on hand. c : will show that a periodic inventory system should be implemented. d : will most likely indicate less than $2 million in merchandise on hand due to unrecorded handling and related losses.

The following cost and inventory data are taken from the accounting records of mason company for the year just completed: costs incurred: direct labor cost $ 90,000 purchases of raw materials $ 134,000 manufacturing overhead $ 205,000 advertising expense $ 45,000 sales salaries $ 101,000 depreciation, office equipment $ 225,000 beginning of the year end of the year inventories: raw materials $ 8,100 $ 10,300 work in process $ 5,900 $ 21,000 finished goods $ 77,000 $ 25,800 required: 1. prepare a schedule of cost of goods manufactured. 2. prepare the cost of goods sold section of mason company’s income statement for the year.