Cost Accumulation: Manufacturing Sonya's Software Company has the following information in its records on December 31 of the current year:

On January I , the Finished Goods account had a balance of $80,000, and the Work in Process Inventory account had a balance of $25,900. All transactions are on account (except depreciation, which is recorded with a debit to Manufacturing Overhead and a credit to Accumulated Depreciation). Sales equaled $1,625,000.

Required:

a. Prepare T-accounts to show these events and the flow of costs for the company.

b. Give the beginning direct materials inventory balance.

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Materials inventory, December 31 Materials purchased during the year Finished goods inventory, December 31 $ 85,000 360,000 90,000 Indirect labor 32,000 Direct labor 400,000 Indirect materials and supplies (taken from materials inventory) 14,000 Factory heat, light, and power 37,200 Building depreciation (all manufacturing) 81,000 Administrative salaries 51,400 Miscellaneous factory costs 17,900 Marketing costs 37,000 Factory supervision 12,100 Insurance on factory equipment 19,000 Transportation-in on materials 1,600 Taxes on manufacturing property 13,100 Legal fees on customer complaint 8,200 Direct materials used 382,100 Work in process inventory, December 31 24,600