As of December 31, 2017, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2017, there was $1,600 of materials on hand. During the year, the company purchased $354,000 of materials; however it paid for only $314,000. How much inventory was requisitioned for use on jobs during 2017?

Question

Jocelynn Hensley

Business

3 May, 14:29

As of December 31, 2017, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2017, there was $1,600 of materials on hand. During the year, the company purchased $354,000 of materials; however it paid for only $314,000. How much inventory was requisitioned for use on jobs during 2017?

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Answers (1)

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Nataly Johns · Answer 1

The $353,600 should be requisitioned for use on jobs during 2017

Explanation:

For computing how much inventory is consumed during 2017, the following equation should be used.

Raw material consumed = Opening raw material balance + purchase of raw material - ending raw material balance

So, it is equal to

= $1,600 + $354,000 - $2,000

= $353,600

The paid value which is related to the inventory is not been considered. Thus, it is irrelevant portion which is ignored in the computation part. Rest values should be taken for computation part.

Hence, the $353,600 should be requisitioned for use on jobs during 2017