Amoeba Manufacturing Company Provided the Following Information for the Year

question 7

Multiple Choice

Amoeba Manufacturing Company provided the following information for the year 2015: $$\begin{array} { | l | r | } \hline \text { Purchases-Raw Materials } & \$ 90,000 \\\hline \text { Plant Utilities \& Insurance } & 67,500 \\\hline \text { Indirect Materials } & 11,750 \\\hline \text { Dirdirect Labor } & 4,750 \\\hline \text { Direct Materials Used in Production } & 96,000 \\\hline \text { Direct Labor } & 117,500 \\\hline \text { Depreciation on Factory Plant \& Equipment } & 6,000 \\\hline\end{array}$$ The inventory account balances as of January 1^st 2015 are given below.
$$\begin{array} { | l | r | } \hline \text { Raw Materials Inventory } & \$ 42,000 \\\hline \text { Work-in-Process Inventory } & 12,000 \\\hline \text { Finished Goods Inventory } & 49,500 \\\hline\end{array}$$ What is the ending balance in the Raw Materials Inventory account?

• A) $54,000
• B) $6,000
• C) $111,000
• D) $24,250

---

Definitions:

Cost Recovery Method

An accounting technique used for recognizing revenue only once the costs of the sold goods or services have been recovered.

Uncollectible Accounts

Also known as bad debts, these are receivables that a business is unable to collect, often leading to their write-off as an expense.

IFRS

International Financial Reporting Standards, a set of accounting principles that dictate how companies' financial statements are prepared.

Initial Franchise Fee

A one-time payment made by a franchisee to the franchisor when a new franchise agreement is signed, covering rights to use trademarks, systems, and support.