Blue Dynamics Manufactures Custom Water Fountains and Employs Job-Order Costing

question 147

Multiple Choice

Blue Dynamics manufactures custom water fountains and employs job-order costing system.Beginning raw materials on October 1 totaled $15,600.During October, Blue Dynamic's transactions and accounts included the following: $\begin{array}{lll}\text {Raw materials acquired for cash }&\$7,500\\\text {Raw materials received on account }&88,900\\\text { Direct materials requisitioned and transferred to production }&91,200\\\text { Cost of goods manufactured}&187,900\\\end{array}$ How much is the balance of Raw Materials on October 31?

• A)$20,800
• B)$96,400
• C)$5,200
• D)$9,800

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Definitions:

Cash Effect

The impact of any transaction on a company's cash and cash equivalents, indicating how the transaction alters the company's liquidity.

Accounts Receivable

Funds due to a company from its clients for products or services already provided but still unpaid.

Cash Effect

The impact of a business transaction on the cash and cash equivalents held by the company, reflecting how an event affects its liquidity.

Merchandise Inventory

Goods that a retailer, distributor, or manufacturer aims to sell to generate revenue, recorded as a current asset on the balance sheet.