Problem 7-61 (Static) Reconstruct Missing Data (LO 7-2, 3) A tornado struck the only manufacturing plant of Toledo Farm Implements (TFI) on June 1. All work-in-process inventory was destroyed, but a...


Problem 7-61 (Static) Reconstruct Missing Data (LO 7-2, 3)



A tornado struck the only manufacturing plant of Toledo Farm Implements (TFI) on June 1. All work-in-process inventory was destroyed, but a few records were salvaged from the wreckage and from the company's headquarters. If acceptable documentation is provided, the loss will be covered by insurance. The insurable value of work-in-process inventory consists of direct materials, direct labor, and applied overhead.



The following information about the plant appears on the April financial statements at the company's downtown headquarters:




































































Materials inventory, April 30$98,000
Work-in-process inventory, April 30172,400
Finished goods inventory, April 3064,000
Cost of goods sold through April 30697,200
Accounts payable (materials suppliers), April 3043,200
Manufacturing overhead through April 30369,800
Payroll payable, April 300
Withholding and other payroll liabilities, April 3019,400
Overhead applied through April 30359,200


A count of the inventories on hand May 31 shows the following:

































Materials inventory$86,000
Work-in-process inventory?
Finished goods inventory75,000


The accounts payable clerk tells you that outstanding bills to suppliers totaled $100,200 and that cash payments of $75,800 were made to them during the month. She informs you that the payroll costs last month for the manufacturing section included $164,800, of which $29,400 was indirect labor.


At the end of May, the following balances were available from the main office:


























Manufacturing overhead through May 31$434,000
Cost of goods sold through May 31793,200




Recall that each month there is only one requisition for indirect materials. Among the fragments of paper, you located the following information, which you have neatly typed for your records:



From scrap found under desk: indirect materials → $4,172



You also learn that the overhead during the month was overapplied by $2,400.





Required:


Determine the cost of the work-in-process inventory lost in the disaster.





Jun 09, 2022
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