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Finished goods were $34,000 on June 1 and $26,000 on June 30, and the cost of goods manufactured in June was $132,000. What is cost of goods sold for June?
A$140,000
B$166,000
C$124,000
D$158,000
Answer & Solution
Correct answer: A. $140,000
1. Finished Goods opens at $34,000 and receives the cost of goods manufactured of $132,000.
2. Cost of goods available for sale is $34,000 plus $132,000, which is $166,000.
3. Goods still unsold on June 30 are worth $26,000 and stay in Finished Goods.
4. Cost of goods sold is $166,000 minus $26,000, which is $140,000.
5. $166,000 is the amount available for sale, not the amount actually sold.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 1.3.1 Financial Reporting for a Manufacturer_
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