As of December 31, 2019, Sheridan Company had $3500 of raw materials inventory. At the beginning of 2019, there was $3000 of materials on hand. During the year, the company purchased $315000 of materials; however, it paid for only $252500. How much inventory was requisitioned for use on jobs during 2019

Question

Business

Karma Farmer

20 August, 13:23

As of December 31, 2019, Sheridan Company had $3500 of raw materials inventory. At the beginning of 2019, there was $3000 of materials on hand. During the year, the company purchased $315000 of materials; however, it paid for only $252500. How much inventory was requisitioned for use on jobs during 2019

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Answers (1)

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Steven Davies · Answer 1

Answer: $314,500

Explanation:

When calculating how much of a material of any sort was used, the following formula should be used,

= Beginning inventory + Purchases - Ending inventory

This is the same formula largely used to calculate Cost of Goods sold.

Here, the figure to be concerned about is the actual materials used not the ones paid for.

Plugging in figures into the formula then,

= 3,000 + 315,000 - 3,500

= $314,500

Thus $314,500 was the inventory requisitioned for use on jobs during 2019.