Question

EXTRA CREDIT - Bring to Exam or submit prior to Exam Information for Wilkinson Works Industries as of December 31, 2019, follows. Prepare (a) the company's schedule of cost of goods manufactured for the year ended December 31; (b) prepare the company's income statement that reports separate categories for selling and general and administrative expenses. $157,000 62,400 18,900 10,750 35,000 486,400 13,200 182,400 420,240 35,570 14,000 27,800 10,100 Administrative salaries expense Depreciation expense - Factory equipment Depreciation expense - Delivery vehicles Depreciation expense - Office equipment Advertising expense Direct labor Factory supplies used Income taxes expense Indirect labor Indirect material Factory insurance Factory utilities Factory maintenance Inventories: Raw materials, January 1 Raw materials,, December 31 Work in process, January 1 Work in process, December 31 Finished goods, January 1 Finished goods, December 31 Raw materials purchases Rent expense - Factory Rent expense - Office space Rent expense - Selling space Sales salaries expense Sales Sales discounts 28,000 32,000 37,460 34,580 62,500 48,970 305,020 60,000 12,000 36,000 84,600 2,552,000 38,280 11 Page

Answer 1

(a) Cost of Goods Manufactured Schedule

	Direct Material
	Opening Raw Material Inventory (Jan 1)	$                      28,000
Add:	Direct material purchases	$                    305,020
	Raw Material Available for Use	$                    333,020
Less:	Closing Raw Material Inventory (Dec 31)	$                    (32,000)
	Raw Material Used in Production (Direct Material)		$                  301,020
	Direct Labor		$                  486,400
	Manufacturing Overhead
	Depreciation: Factory Equipment	$                      62,400
	Indirect materials used	$                      35,570
	Indirect labor	$                    420,240
	Factory Insurance	$                      14,000
	Factory Supplies Used	$                      13,200
	Factory maintainance	$                      10,100
	Factory Rent	$                      60,000
	Factory utilities	$                      27,800	$                  643,310
	Total Manufacturing Cost		$               1,430,730
Add:	Opening Work in Progress (Jan 1)		$                    37,460
Less:	Closing Work in Progress (Dec 31)		$                  (34,580)
	Cost of Goods Manufactured		$               1,433,610

(b) Income Statement

	Sales		$                       2,552,000
Less:	Sales Discount		$                           (38,280)
	Net Sales		$               2,513,720
	Cost of Goods Sold
	Opening Finished Goods Inventory (Jan 1)	$                      62,500
	Cost of Goods Manufactured	$                 1,433,610
	Total Goods Available for Sale	$                 1,496,110
Less:	Closing Finished Goods Inventory (Dec 31)	$                    (48,970)
	Cost of Goods Sold		$             (1,447,140)
	Gross Profit		$               1,066,580
	Operating Expenses
	Selling expenses
	Sales Salaries Expense	$                      84,600
	Rent Expense : Selling Space	$                      36,000
	Advertising Expense	$                      35,000
	Depreciation: Delivery Vehicles	$                      18,900
		$                  (174,500)
	General & Administrative expenses
	Administrative Salaries Expense	$                    157,000
	Depreciation Expense: Office Equipment	$                      10,750
	Rent Expense : Office Space	$                      12,000
		$                  (179,750)
Less:	Total Operating Expenses		$                (354,250)
	Income Before Tax		$                  712,330
Less:	Income Tax Expense		$                         (182,400)
	Net Income		$                           529,930