Question

The following data refer to San Fernando Fashions Company for the year 20x2:

Sales revenue	$	1,050,000
Work-in-process inventory, December 31		30,000
Work-in-process inventory, January 1		36,000
Selling and administrative expenses		150,000
Income tax expense		70,000
Purchases of raw material		160,000
Raw-material inventory, December 31		25,000
Raw-material inventory, January 1		20,000
Direct labor		200,000
Utilities: plant		40,000
Depreciation: plant and equipment		50,000
Finished-goods inventory, December 31		50,000
Finished-goods inventory, January 1		20,000
Indirect material		8,000
Indirect labor		12,000
Other manufacturing overhead		60,000

1. Prepare San Fernando Fashions’ schedule of cost of goods manufactured for the year.

SAN FERNANDO FASHIONS COMPANY Schedule of Cost of Goods Manufactured For the Year Ended December 31, 20x2 Forth Direct material: Manufacturing overhead: Total manufacturing overhead Total manufacturing costs Subtotal Cost of goods manufactured

2. Prepare San Fernando Fashions’ schedule of cost of goods sold for the year.  

3. Prepare San Fernando Fashions’ income statement for the year.

Answer 1

San Fernando Fashions company
Cost of Goods manufactured
		Amount
Direct Material
Beginning Raw Material Inventory	$                                                       20,000.00
Add: Purchases	$                                                   1,60,000.00
Total raw material available	$                                                   1,80,000.00
Less: Ending Raw Material	$                                                     -25,000.00
Raw Material used in Production		$          1,55,000.00
Direct Labor		$          2,00,000.00
Manuafcturing Overhead
Indirect Material	$                                                         8,000.00
Indirect Labor	$                                                       12,000.00
Utilties:Plant	$                                                       40,000.00
Depreciation: Plant & Equipment	$                                                       50,000.00
Other	$                                                       60,000.00
Total Manufacturing Overhead		$          1,70,000.00
Total Manufacturing Cost		$          5,25,000.00
Add: Work in Process January 1st,		$              36,000.00
Total		$          5,61,000.00
Less: Work in Process Ending Dec 31st		$            -30,000.00
Cost of goods manufactured		$          5,31,000.00
San Fernando Fashions company
Cost of goods sold
	Amount
Beginning Finished goods Inventory=(A)	$                                                       20,000.00
Add: Cost of goods manufactured=(B)	$                                                   5,31,000.00
Cost of goods avaialable for sale(C)=(A)+(B)	$                                                   5,51,000.00
Less: Ending Finished goods Inventory=(D)	$                                                       50,000.00
Cost of goods sold (E )=(C)-(D)		$          5,01,000.00
San Fernando Fashions company
Income Statement
Sales Revenue=(A)	$                                                 10,50,000.00
Less: Cost of goods sold=(B)	$                                                   5,01,000.00
Gross Profit=(C )=(A)-(B)	$                                                   5,49,000.00
Selling and Administrative Expense=(D )	$                                                   1,50,000.00
Income before tax=(E )=(C )-(D)	$                                                   3,99,000.00
Income tax=(F )	$                                                       70,000.00
Net Income=(E )-(F)	$                                                   3,29,000.00