On December 29, Patten Products Inc. sells equipment that cost $20,000. After recording the entry to bring the accumulated depreciation up-to-date through the date of the sale, the equipment had accumulated depreciation of $18,000. Patten received $1,500 cash from the company that purchased the equipment. Complete the necessary journal entry.

Instructions are below.

Explanation:

Giving the following information:

Beginning raw materials inventory $14,000

Ending raw materials inventory 17,000

Raw material purchases 91,000

Beginning work in process inventory 26,000

Ending work in process inventory 36,000

Direct labor 116,000

Total factory 91,000

Beginning finished goods inventory 66,000

Ending finished goods inventory 46,000

First, we need to calculate the direct material used:

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 14,000 + 91,000 - 17,000

Direct material used= 88,000

Now, we can calculate the cost of goods manufactured:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 26,000 + 88,000 + 116,000 + 91,000 - 36,000

cost of goods manufactured= 285,000

Finally, we can determine the cost of goods manufactured:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 66,000 + 285,000 - 46,000

COGS= $305,000