On January 1, 20x3, Fallon Company, a manufacturer of consumer products, had a balance in direct materials inventory of $100,000.During the year, an additional $400,000 of direct materials were purchased.Also during 20x3, direct materials worth $450,000 were transferred to work-in-process inventory.What was Fallon Company's ending direct materials inventory at December 31, 20x3?

Question

Quizplus · Accepted Answer

To find the ending direct materials inventory, we need to subtract the direct materials used (transferred to work-in-process inventory) from the direct materials purchased. 
Direct materials purchased = $100,000 + $400,000 = $500,000
Direct materials used (transferred to work-in-process inventory) = $450,000
Ending direct materials inventory = Direct materials purchased - Direct materials used
Ending direct materials inventory = $500,000 - $450,000 = $50,000

On January 1, 20x3, Fallon Company, a Manufacturer of Consumer