Question
Cathcart Corporation had the following inventory balances on January 1, 2020: Raw Materials Inventory $10,000 Work in Process Inventory $20,000 Finished Goods Inventory $28,000 During
Cathcart Corporation had the following inventory balances on January 1, 2020: Raw Materials Inventory $10,000 Work in Process Inventory $20,000 Finished Goods Inventory $28,000 During 2020, the following transactions occurred: 1. Purchased $60,000 of raw materials on account. 2. $40,000 of raw materials were issued to the factory of which $35,000 are considered to be direct materials. 3. Total factory labor charges included 10,000 direct labor hours paid at $8 per hour and $20,000 of indirect labor charges. 4. Other factory overhead costs incurred included $8,000 of factory depreciation, $1,000 of expired factory insurance, $3,000 of accrued factory property taxes, and $4,000 of miscellaneous factory costs paid in cash. 5. Units with a total cost of $154,000 were completed. 6. Units with a total cost of $140,000 were sold for $200,000 cash. Cathcart Company uses an actual costing system. REQUIRED: A. Complete a cost-flow T-account diagram. B. Prepare all of the necessary journal entries. C. Prepare a manufacturing statement and a partial (through gross profit) income statement
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