Question

Required information

The following selected account balances are provided for Delray Mfg.

Sales	$	1,250,000
Raw materials inventory, Dec. 31, 2016		37,000
Work in process inventory, Dec. 31, 2016		53,900
Finished goods inventory, Dec. 31, 2016		62,750
Raw materials purchases		175,600
Direct labor		225,000
Factory computer supplies used		17,840
Indirect labor		47,000
Repairs—Factory equipment		5,250
Rent cost of factory building		57,000
Advertising expense		94,000
General and administrative expenses		129,300
Raw materials inventory, Dec. 31, 2017		42,700
Work in process inventory, Dec. 31, 2017		41,500
Finished goods inventory, Dec. 31, 2017		67,300

Prepare an income statement for Delray Mfg. (a manufacturer). DELRAY MFG. Income Statement For Year Ended December 31, 2017 $ 1,250,000 Sales Cost of goods sold: Cost of goods available for sale Cost of goods sold Operating expenses: Total operating expenses Operating income $ 0

Answer 1

DELRAY MFG. Income Statement For Year Ended December 31, 2017 $ 1,250,000.00 Sales Cost of goods sold : Finished Goods inventory, December 31 2016 Cost of goods manfactured $ 62,750.00 $534,390.00 $ 597,140.00 $ 67,300.00 Cost of goods available for sale Less: Finished goods inventory December 31,2017 Cost of goods sold Gross profit Operating expenses : Advertising expenses General and administrative expense $ 529,840.00 $ 720,160.00 $ 94,000.00 $ 129,300.00 Total Operating expenses Operating Income $ 223,300.00 $ 496,860.00 Working note : Cost of goods manfactured Direct materials: Raw material inventory december 31 2016 Add: Raw material purchase Raw material available for use Less : Raw material inventory december 31 2017 Direct material used Direct labour $ 37,000.00 $ 175,600.00 $ 212,600.00 $ (42,700.00) $ 169,900.00 $ 225,000.00 Factory overhead : Factory computer supplies Indirect labour Repairs - factory equipment Rent cost of factory building $ 17,840.00 $ 47,000.00 $ 5,250.00 $ 57,000.00 Total factory Overhead costs Total Manfacturing costs Add : work in process inventory, December 31 2016 Total cost of work in process less : work in process inventory, december 31 2017 Cost of goods manfactured $ 127,090.00 $ 521,990.00 $ 53,900.00 $ 575,890.00 $ (41,500.00) $ 534,390.00