Stephenson Company's Computer System Recently Crashed, Erasing Much of the Company's

question 38

Multiple Choice

Stephenson Company's computer system recently crashed, erasing much of the company's financial data. The following accounting information was discovered soon afterwards on the CFO's back-up computer data. $\begin{array}{lr}\text { Cost of Goods Sold } & \$ 380,000 \\\text { Work-in-Process Inventory, Beginning } & 30,000 \\\text { Work-in-Process Inventory, Ending } & 40,000 \\\text { Selling and Administrative Expense } & 50,000 \\\text { Finished Goods Inventory, Ending } & 15,000 \\\text { Finished Goods Inventory, Beginning } & ?\\\text { Direct Materials Purchased } & 171,000 \\\text { Factory Overhead Applied } & 112,000 \\\text { Operating Income } & 22,000 \\\text { Direct Materials Inventory, Beginning } & 18,000 \\\text { Direct Materials Inventory, Ending } & 6,000 \\\text { Cost of Goods Manufactured } & 340,000 \\\text { Direct Labor } & 55,000\end{array}$ The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end.
What should be the amount of direct materials available for use?

• A)$112,000.
• B)$183,000.
• C)$189,000.
• D)$204,000.

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Definitions:

Copyright

A legal right granted to an author, composer, playwright, publisher, or distributor to exclusive publication, production, sale, or distribution of their original work.

Trademark

A recognizable symbol, design, or expression that uniquely identifies and legally protects the brand or product of a particular source from being used by others.

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Revenue Expenditure

Expenses incurred by an organization in its day-to-day operations which do not add to the value of an asset.