An auditor for Internal Revenue Service is trying to reconstruct some partially destroyed records of two taxpayers. For each of the cases in the accompanying list, find the unknown designated by capital letters (figures are assumed to be in thousands).

Case 1 Case 2

Accounts receivable, December 31, 1997 $ 6,000 $ 2,100

Cost of goods sold A 20,000

Accounts payable, January 1, 1997 3,000 1,700

Accounts payable, December 31, 1997 1,800 1,500

Finished goods inventory, December 31, 1997 B 5,300

Gross margin 11,300 C

Work in process, January 1, 1997 0 800

Work in process, December 31, 1997 0 3,000

Finished goods inventory, January 1, 1997 4,000 4,000

Direct material used 8,000 12,000

Direct manufacturing labor 3,000 5,000

Indirect manufacturing costs 7,000 D

Purchases of direct material 9,000 7,000

Revenues 32,000 31,800

Accounts receivable, January 1, 1997 2,000 1,400

A distraught employee, Guy Arson, put a torch to a manufacturing plant on a blustery February 26. The resulting blaze completely destroyed the plant and its contents. Fortunately, certain accounting records were kept in another building. They revealed the following for the period from January 1, 1997 to February 26, 1997:

Direct materials purchased $160,000

Work in process, January 1, 1997 $ 34,000

Direct materials, January 1, 1997 $ 16,000

Finished goods, January 1, 1997 $ 30,000

Indirect manufacturing costs 40% of conversion costs

Revenues $500,000

Direct manufacturing labor $180,000

Prime costs $294,000

Gross margin percentage based on sales 20%

Cost of goods available for sale $450,000

The loss was fully covered by insurance. The insurance company wants to know the historical cost of the inventories as one factor considered when negotiating a settlement.

Calculate the cost of

1. finished goods inventory, February 26, 1997
2. work-in-process inventory, February 26, 1997
3. direct materials inventory, February 26, 1997