Porky, Inc., started the year with $90,000 in direct materials.During the year, Porky Inc.purchased $535,000 in direct materials, and used $500,000 in materials.The direct materials inventory on the balance sheet is _____.
A)$35,000
B)$125,000
C)$90,000
D)$535,000

Question

Quizplus · Accepted Answer

The direct materials inventory at the end of the year can be calculated as:

Direct materials inventory = Beginning inventory + Purchases - Direct materials used
Direct materials inventory = $90,000 + $535,000 - $500,000
Direct materials inventory = $125,000

Therefore, the direct materials inventory on the balance sheet is $125,000 (choice B).