Smooth Sailing Company Experienced the Following Events During 2020

Essay

Smooth Sailing Company experienced the following events during 2020:
(1) Purchased $1,800,000 of lumber and other materials for building boats.
(2) Incurred $200,000 for advertising.
(3) Paid $60,000 to have lumber transported to its factory.
(4) Had sales revenue of $6,000,000 during the year.
(5) Incurred $400,000 of general and administrative expenses.
(6) Took a periodic inventory at year-end and determined that material costing $400,000 was on hand. The inventory at the beginning of the year was $200,000.
(7) All costs incurred were added to the appropriate accounts. All sales were on credit.
Required:
Solve for the following items in the company's Raw Materials inventory account:
a) Transfers in (TI).
b) Beginning balance (BB).
c) Transfers out (TO).
d) Ending balance (EB).