Santos Inc. had the following information for the preceding year: Additional information for the year is as follows: What was the ending Finished Goods Inventory balance on 12/31?

Question

Santos Inc. had the following information for the preceding year:  Additional information for the year is as follows:  What was the ending Finished Goods Inventory balance on 12/31?

Quizplus · Accepted Answer

The ending balance of finished goods inventory can be calculated using the following formula: Beginning Finished Goods Inventory + Cost of Goods Manufactured - Cost of Goods Sold = Ending Finished Goods Inventory. 
From the given information, we can calculate the Cost of Goods Manufactured as: 
Direct Materials Used + Direct Labor + Manufacturing Overhead + Beginning Work in Process Inventory - Ending Work in Process Inventory = Cost of Goods Manufactured 
$240,000 + $140,000 + $100,000 + $30,000 - $20,000 = $490,000 
And we can calculate the Cost of Goods Sold as: 
Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory = Cost of Goods Sold 
$15,000 + $490,000 - X = $510,000  (where X is the Ending Finished Goods Inventory) 
Solving for X, we get:
X = $11,000