Manufacturing Financial Statements

Manufacturing Financial Statements - financial statements...

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Manufacturing Financial Statements Manufacturing companies have several different accounts compared to service and  merchandising companies. These include three types of inventory accounts—raw  materials, work-in-process, and finished goods—and several long-term fixed asset  accounts. A manufacturing company uses purchased raw materials and/or parts to  produce a product for sale. At a point in time, the company's inventories consist of  raw  materials , those materials and parts waiting to be used in production;  work-in- process , all material, labor, and other manufacturing costs accumulated to date for  products not yet completed; and  finished goods , the cost of completed products that  are ready to be sold. The value of each type of inventory is disclosed in a company's 
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Unformatted text preview: financial statements. The amounts may be shown individually on the face of the balance sheet or disclosed in footnotes. In the long-term asset section of a manufacturing company's balance sheet, one would expect to find factory buildings and equipment and possibly a small tools account. A manufacturer often has patents for its products or processes. The capitalized costs associated with a patent would be included in the intangible asset section of the balance sheet. The income statement for a manufacturing company is similar to that prepared for a merchandising company. In calculating cost of goods sold, only the finished goods inventory account is used...
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