Question

66 Prepare the income statement for Blue Sea Company for the most recent year. Use the calculation of cost of goods sold, cost of goods manufactured, and the amounts below. Assume that the company sold 39,000 units of its product at a price of $10 each during the year. (Click the icon to view the amounts.) (Click the icon to view the calculation of cost of goods manufactured.) A Data Table (Click the icon to view the calculation of cost of goods sold.) - X Blue Sea Company Income Statement For Current Year Beginning End of End of of Year Year Year Raw materials inventory .........$ 24,000 $ 28,000 Insurance on plant............................$ 10,000 Work in process inventory ........$ 35,000 $ 31,000 Depreciation-plant building and equipment .... $ 13,100 Finished goods inventory ......$ 18,000 $ 26,000 Repairs and maintenance-plant ..............$ 3,500 Purchases of direct materials ... $ 70,000 Marketing expenses. ........ $ 75,000 Direct labor .. $ 81,000 General and administrative expenses ....... $ 25,500 Indirect labor ....... $ 44,000 Less: Less: Print Print Done Done

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Answer 1

Income Statement
Particulars	Amount in $
Revenue	390000	(39000 units * $10)
Less: Cost of Goods Sold	-213600	Note 1
Gross Profit	176400
Less : Other Indirect Expenses
Marketing expenses	-75000
General and admin expenses	-25500
Net Income	75900

Note 1
Cost of Goods Sold
Beginning FG Inventory	18000	Refer Data Table in question
Plus: Cost of goods manufactured	221600	Refer beside cost of goods manufactured				Cost of goods manufactured
	239600
less: Ending FG Inventory	26000	Refer Data Table in question				Beginning WIP Inventory	35000	Refer Data Table in question
COGS	213600					Plus: manufacturing cost incurred
						direct materials	66000	Note 2
						Direct Labor	81000	Refer Data Table in question
						Manufacturing overhead	70600	Note 3
						Total manufacturing cost	252600
						Less: Ending WIP inventory	31000	Refer Data Table in question
						Cost of goods manufactured	221600

Note 2			Note 3
Direct Material			Manufacturing overhead
Beginning Raw material Inventory	24000		Indirect Labor	44000
Plus: Purchase of direct materials	70000		Insurance on Plant	10000
	94000		Depreciation	13100
Less: Ending Raw material Inventory	-28000		Repair and Maintenance	3500
Direct Material	66000		Total	70600