Answer:
$844,000
Explanation:
From the question, we can let:
CGS = cost of goods sold = ?
BWIP = beginning work in process inventory = $130,000
CGM = cost of goods manufactured = $866,000
BFGI = beginning finished goods inventory = $192,000
EWIP = ending work in process inventory = $170,000
EFGI = ending finished goods inventory = $214,000
In accounting, CGS is calculated by deducting EFGI from the addition of BFGI and CGM as follows:
CGS = BFGI + CGM - EFGI
= ($192,000 + $866,000) - $214,000
= $1,058,000 - $214,000
= $844,000
Therefore, Crane Company's cost of goods sold for the year is $844,000.
Note:
Both BWIP and EWIP have already been used under Manufacturing Accounts to obtain CGM. Therefore, they cannot be used again to calculate the CGS.
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