Question

Required information Problem 18-3A Schedule of cost of goods manufactured and income statement; inventory analysis LO P2, A1 [The following information applies to the questions displayed below.) The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company. $ Advertising expense Depreciation expense-Office equipment Depreciation expense-Selling equipment Depreciation expense-Factory equipment Factory supervision Factory supplies used Factory utilities Inventories Raw materials, December 31, 2016 Raw materials, December 31, 2017 Work in process, December 31, 2016 Work in process, December 31, 2017 Finished goods, December 31, 2016 Finished goods, December 31, 2017 28,500 Direct labor 8,000 Income taxes expense 10,300 Indirect labor 37,200 Miscellaneous production costs 130,300 Office salaries expense 8,200 Raw materials purchases 35,000 Rent expense-Office space Rent expense-Selling space 158,300 Rent expense-Factory building 184,000 Maintenance expense-Factory equipment 18,400 Sales 20,400 Sales salaries expense 161,900 140,400 $ 686,700 295,700 56,700 12,000 71,000 932,000 23,000 28,800 78, 200 37,100 4,536,600 394,600

Answer 1

Ans.	LEONE COMPANY
	Income Statement
	For Year Ended December 31, 2017
	Particulars	Amount	Amount
	Sales		$4,536,600
	Less: Cost of goods sold:
	Cost of Goods Manufactured	$1,985,700
	Add: Beginning finished goods inventory	$161,900
	Cost of goods available for sale	$2,147,600
	Less: Ending finished goods inventory	-$140,400
	Cost of goods sold		$2,007,200
	Gross margin		$2,529,400
	Less: Operating expenses:
	Selling expenses:
	Depreciation expenses - Selling equipment	$10,300
	Rent expenses - Selling space	$28,800
	Sales salaries expense	$394,600
	Advertising expense	$28,500
	Total Selling Expenses (1)		$462,200
	General and Administrative expenses:
	Depreciation expenses - Office equipment	$8,000
	Office salaries expenses	$71,000
	Rent expenses - Office space	$23,000
	Total General and Administative Expenses (2)		$102,000
	Total operating expenses (1 + 2)		$564,200
	Income before taxes		$1,965,200
	Less: Income tax expense		$295,700
	Net income		$1,669,500
	Working   Notes:
	*Calculations for Cost of goods manufactured:
	SCHEDULE   OF   COST   OF   GOODS   MANUFACTURED
	Particulars	Amount	Amount
	Direct materials:
	Beginning raw materials inventory	$158,300
	Add: Purchase of direct materials	$932,000
	Raw materials available	$1,090,300
	Less: Ending raw materials inventory	-$184,000
	Direct materials used (A)		$906,300
	Direct labor (B)		$686,700
	Manufacturing overhead applied:
	Indirect labor	$56,700
	Factory utilities	$35,000
	Rent expenses - factory building	$78,200
	Factory supplies used	$8,200
	Factory supervision	$130,300
	Depreciation expenses - factory equipment	$37,200
	Maintenance expenses - factory equipment	$37,100
	Miscellaneous production cost	$12,000
	Total manufacturing overhead ©		$394,700
	Total manufacturing costs (A+B+C)		$1,987,700
	Add: Beginning Work in process inventory		$18,400
	Less: Ending Work in process inventory		-$20,400
	Cost of goods manufactured		$1,985,700