Inventive Controls Ltd At December 31, 2019, There Was No Work-In-Process, but 30

question 87

Essay

Inventive Controls Ltd. was incorporated and started business early in January 2019 to manufacture electronic control devices to monitor traffic. Inventive purchased a small manufacturing plant and office building in a new industrial park and was in operation immediately. General ledger account balances at December 31, 2019 are as follows:
$$\begin{array} { l | r | } \hline \text { Sales commission } & 62,000 \\\hline \text { Supervisory salaries, production manager } & 66,000 \\\hline \text { Executive salaries } & 120,000 \\\hline \text { Raw material purchases } & 136,500 \\\hline \text { Miscellaneous plant supplies } & 13,700 \\\hline \text { Depreciation, office building } & 7,900 \\\hline \text { Depreciation, plant equipment } & 9,900 \\\hline \text { Property tax (80\% for office building; 20\% for plant building) } & 4,400 \\\hline \text { Sales } & 850,000 \\\hline \text { Direct labour } & 64,000 \\\hline \text { Raw material inventory, Dec } 31,2019 & 13,600 \\\hline \text { Utilities expense (60\% related to office) } & 19,000 \\\hline \text { General administrative expense } & 42,300 \\\hline\end{array}$$ At December 31, 2019, there was no work-in-process, but 30% of the units manufactured remained in ending finished goods inventory. Inventive uses the straight-line method to calculate depreciation.
Required:
a. Calculate the value of cost of goods sold and ending finished goods inventory under IFRS.
b. Prepare an income statement for Inventive for the year ended December 31, 2019.

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Definitions:

Embryonic Stage

The period in prenatal development from fertilization until around the end of the eighth week, where significant growth and differentiation of the embryo occurs.

Teratogen

Any agent that can cause developmental malformations (birth defects) in a fetus when exposure occurs during pregnancy.

Environmental Toxins

Harmful pollutants or chemicals present in the environment that can cause adverse health effects on humans and wildlife.

Alcohol

A psychoactive substance that is found in beverages such as beer, wine, and spirits, and can alter mood, cognition, and behavior.