Question

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

Inventories	January 1		December 31
Materials	$77,350		$95,550
Work in process	109,200		96,200
Finished goods	113,750		100,100

Advertising expense	$68,250
Depreciation expense-office equipment	22,750
Depreciation expense-factory equipment	14,560
Direct labor	186,550
Heat, light, and power-factory	5,850
Indirect labor	23,660
Materials purchased	123,500
Office salaries expense	77,350
Property taxes-factory	4,095
Property taxes-headquarters building	13,650
Rent expense-factory	6,825
Sales	864,500
Sales salaries expense	136,500
Supplies-factory	3,250
Miscellaneous costs-factory	4,420

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
			$
Direct materials:
	$
	$
		$
Factory overhead:
	$
Total factory overhead
Total manufacturing costs incurred in 20Y6
Total manufacturing costs			$
			$

2. Prepare the 20Y6 income statement.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
			$
Cost of good sold:
		$
		$
			$
Operating expenses:
Administrative expenses:
	$
		$
Selling expenses:
	$
Total operating expenses
			$

Answer 1

109200 SHANIKA COMPANY STATEMENT OF COST OF GOODS MANUFACTURED FOR THE YEAR ENDED DECEMBER 31, 2016 Work in process inventory, January1, 2016 Direct materials Material inventory, January1, 20Y6 (A) 77350 Purchases (B) 123500 Cost of material available for use (A+B) 200850 Less: Material inventory, December31, 2046 95550 Cost of Direct material used in production 105300 Direct Labor 186550 Factory overheads: Indirect labor 23660 Depreciation expenses - factory equipment 14560 Heat,light&power - factory 5850 Property tax-Factory 4095 Rent expenses - factory 6825 Supplies Factory 3250 Miscellaneous cost - Factory 4420 Total Factory over heads 62660 Total manufacturing cost incurred in, 2016 Total manufacturing cost Less: Work in process inventory December31,2016 Cost of goods manufactured 354510 463710 962001 367510

864500 SHANIKA COMPANY Income Statement FOR THE YEAR ENDED DECEMBER 31, 2046 Sales Cost of goods sold: Finished goods inventory, January1, 2016 113750 Cost of goods manufactured 367510 Cost of finished goods available 481260 Less: Finished goods inventory, December31,2016 100100 Cost of goods sold Gross profit Operating expenses: Administrative expenses: Office salary Expenses 77350 Depreciation expenses - office equipment 22750 Property taxes-head quarters building 13650 113750 Selling expenses: Advertisement expenses 68250 Sales salaries expenses 136500204750 Total Operating Expenses Net Income 381160 483340 318500 164840