Reimel Furniture Company, Inc. incurred the following costs during 20x2.

Direct material used $174,000
Direct labor 324,000
Manufacturing overhead 180,000

During 20x2, products costing $120,000 were finished, and products costing $132,000 were sold on account for $195,000. There were no purchases of raw material during the year. The beginning balances in the firm's inventory accounts are as follows:

Raw material $227,000
Work in process 18,000
Finished goods 30,000

Prepare balance sheet.

Explanation:

Accounts Receivable

Beg. Bal.

Sales195000

End. Bal.195000

Raw Material Inventory

Beg. Bal.227000

174000Direct material used

End. Bal.53000

Wages Payable

Beg. Bal.

324000Direct labor

End. Bal. 324000

Finished Goods Inventory

Beg. Bal.30000

Completed120000132000Cost of goods sold

End. Bal.18000

Work in Process Inventory

Beg. Bal.18000

Direct materials174000

Direct labor324000

Manufacturing overhead180000120000Completed and tranferred

End. Bal.576000

Manufacturing Overhead

Beg. Bal.

Overhead incurred180000180000Overhead applied

End. Bal.0

Sales Revenue

Beg. Bal.

195000Sales

End. Bal. 195000

Cost of Goods Sold

Beg. Bal.

Finished goods sold132000

End. Bal.132000

                       Reimel Furniture Company

 Partial Balance sheet

 As at December 31 20x2

Current assets        

Cash…………..……………………………………………………………………XXX

Accounts receivable…………………………………………………………XXX

Inventory      

 Raw materials……………………………………………………$53, 000

 Work-in-process………………………………………………..$576, 000

 Finished goods………………………………………………….$18, 000

Explanation:

Before we can prepare the balance sheet, we nee to prepare the general journal T-Accounts for the following accounts in order to arrive at the closing balances.

•Raw materials inventory

•Work in process inventory

•Wages payable

•Finished goods inventory

•Manufacturing overhead

•Sales revenue

•Cost of goods sold

•Accounts receivable

Preparing these T Accounts will help us to arrive the closing balances for the asset accounts that for the balance sheet.  

                                     Raw materials inventory

Opening balance    227, 000Work in process inventory 174, 000

Closing balance      53, 000  

                            Work-in-process inventory

Opening balance                 18, 000  

Raw materials inv               174, 000  

Wages payable                    324, 000  

Manufacturing overhead  180, 000Finished goods             120, 000

Closing balance                   576, 000  

                                                 Wages payable

Work-in-process                 324, 000Profit and loss                324, 000

                                             Finished goods Inventory

Opening balance                30, 000  

Work-in-process                 120, 000Cost of goods sold           132, 000

Closing balance                  18, 000  

                                       Manufacturing Overhead

Profit and loss              180, 000Work-in-process               180, 000

                                                 Sales Revenue

Profit and loss                 195, 000Accounts receivable          195, 000

                                             Accounts Receivable

Sales revenue                  195, 000  

                                             Cost of Goods Sold

Finished goods                   132, 000  Profit and loss

 Reimel Furniture Company

 Partial Balance sheet

 As at December 31 20x2

Current assets        

Cash…………..……………………………………………………………………XXX

Accounts receivable…………………………………………………………XXX

Inventory      

 Raw materials……………………………………………………$53, 000

 Work-in-process………………………………………………..$576, 000

 Finished goods………………………………………………….$18, 000

 Reimel Furniture Company

 Partial Income Statement

      For the year ending December 31, 20x2

Sales revenue……………………………………………………………………………$195, 000

Less: Cost of goods sold……………………………………………………………$132, 000

Gross Margin……………………………………………………………………………$ 63, 000

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