Question

Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1. Inventory Classification January 1, 20x1 December 31, 20x1 Raw material $ 55,000 $ 70,000 Work in process 120,000 115,000 Finished goods 160,000 165,000 During 20x1, the company purchased $250,000 of raw material and spent $400,000 for direct labor. Manufacturing overhead costs were as follows: Indirect material $ 9,000 Indirect labor 26,000 Depreciation on plant and equipment 100,000 Utilities 24,000 Other 30,000 Sales revenue was $1,114,000 for the year. Selling and administrative expenses for the year amounted to $110,000. The firm's tax rate is 40 percent.

Prepare a schedule of cost goods manufactured.

Prepare a schedule of cost of goods sold.

Prepare an income statement.

Answer 1

Answer 1:

Schedule of cost of goods manufactured:

Alhambra Aluminum Compan Schedule of Cost of goods Manufactured For the year ended December 31, 20x:1 Cost of Goods Manufactured: Direct Material Issued/ used $55,000 250,000 Beginning Direct material Invento Add, Purchases Direct Material available for issue/use $305,000 Less, Indirect raw material Less, Ending Invento $9,000 $70,000 |$226,000 $400,000 Direct Labor Manufacturing overhead Indirect material Indirect labor Depreciation on plant and equipment Utilities Others $9,000 $26,000 |$100,000 $24,000 $30,000 $189,000 $815,000 Manufacturing Cost spent during the year Add, Beginning Work-in-progress Less, Ending Work-in-progress 120,000 $115,000 Cost of Goods Manufactured $820,000

Answer 2:

Schedule of cost of goods sold:

Alhambra Aluminum Company Schedule of Cost of goods sold For the year ended December 31, 20x1 Cost of Goods Sold: Direct Material Issued/ used Beginning Direct material Invento Add, Purchases Direct Material available for issue/use $305,000 Less, Indirect raw material Less, Ending Invento $55,000 250,000 $9,000 $70,000 |$226,000 $400,000 Direct Labor Manufacturing overhead Indirect material Indirect labor Depreciation on plant and equipment Utilities Others $9,000 $26,000 |$100,000 $24,000 $30,000 $189,000 $815,000 Manufacturing Cost spent during the year Add, Beginning Work-in-progress Less, Ending Work-in-progress 120,000 $115,000 Cost of Goods Manufactured $820,000 Add, Beginning Finished Goods Inventory $160,000 980,000 $165,000 Goods available for sale Less, Ending Finished goods Invento Cost of Goods Sold: $815,000

Answer 3:

Income Statement: