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Buhler Motor

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Buhler Motor Company manufactures automobiles. During September 2014, the
company purchased 5,000 head lamps at a cost of $10 per lamp. Buhler withdrew 4,650
lamps from the warehouse during the month. Fifty of these lamps were used to replace the
head lamps in autos used by traveling sales staff. The remaining 4,600 lamps were put in
autos manufactured during the month.

Of the autos put into production during September 2014, 90% were completed and
transferred to the company’s storage lot. Of the cars completed during the month, 70%
were sold by September 30

(a) Determine the cost of head lamps that would appear in each of the following accounts
at September 30, 2014: Raw Materials, Work in Process, Finished Goods, Cost of
Goods Sold, and Selling Expenses.

(b)Indicating whether and where each of the accounts in (a) would appear on the income statement or on the balance sheet at September 30, 2014.

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