COST OF GOODS SOLD STATEMENT

Home Comforts is dealing in the manufacturing of wood products since last two decade
in more than 5 cities of Pakistan. The company uses First in First out (FIFO) method for
costing its raw materials. On 1st January 2015, the stocks of raw material, work in process
and finished goods were Rs. 20,000, Rs. 8,000 and Rs. 3,000 respectively. During the
year, material was purchased on 10th January and 15th July at Rs. 100,000 and Rs. 60,000
respectively with total freight inward of Rs. 1,000. Direct Labor cost was Rs. 50,000 and
marketing manager salary was of Rs. 70,000 while conversion cost was recorded as Rs.
80,000.

At the year end, no inventories were found in hand except work in process which was
twice of the balance as on 31st December 2014.

Raw material b/d 12000

Purchases 23000
Freight inward 1000
172000
Total material consumed 181000
Direct Labour 50000
Factory Overhead 30000
Total Factory Cost 261000
WIP b/d 8000
WIP c/d (16000)
Costs of goods manufactured 253000
Finished goods b/d 8000
Finished goods c/d 0
Cost of goods sold 261000