Question

3 Information for York Plastics as of December 31 follows. Prepare (a) the company's manufacturing statement for the year ended December 31; (b) prepare the company's income statement that reports separate categories for selling and general and administrative expenses. Administrative salaries expense $ 135,000 Depreciation expense - Factory equipment 52,400 36,200 Depreciation expense - Delivery vehicles 24,800 Depreciation expense - Office equipment 22,350 Advertising expense 268,000 Direct labor 12,000 Factory supplies used 91,500 Income taxes expense 35,000 Indirect labor Indirect material 24,000 Factory insurance 15,500 Factory utilities 14,000 Factory maintenance 7,500 Inventories Raw materials inventory, January 1 32,000 28,000 Raw materials inventory, December 31 33,780 Goods in process inventory, January 1 37,460 Goods in process inventory, December 31 56,970 Finished goods inventory, January 1 62,000 Finished goods inventory, December 31 325,000 Raw materials purchases 50,000 Rent expense - Factory 24,000 Rent expense - Office space 24,000 Rent expense - Selling Space 97,500 Sales salaries expense 1,452,000 Sales 29,000 Sales discounts

Answer 1

a)

Manufacturing statement of York plastics December 31
Raw material used in production
Raw materials inventory, January 1	$            32,000
Raw materials purchases	$        3,25,000
Raw materials inventory, December 31	$         (28,000)
Raw material used in production		$        3,29,000
Director labor		$        2,68,000
Overheads:
Depreciation expense - Factory equipment	$            52,400
Factory supplies used	$            12,000
Indirect labor	$            35,000
Indirect material	$            24,000
Factory insurance	$            15,500
Factory utilities	$            14,000
Factory maintenance	$              7,500
Rent expense -factory	$            50,000
Total Overheads		$        2,10,400
		$        8,07,400
Add: Goods in progress inventory, January 1		$            33,780
Less: Goods in progress inventory, December 31		$         (37,460)
Cost of goods manufactured		$        8,03,720
Add: Finished goods inventory, January 1		$            56,970
Less: Finished goods inventory, December 31		$         (62,000)
Cost of goods sold		$        7,98,690

b)

Income statement of York plastics December 31
Sales	$        14,52,000
Less: Sales discount	$            (29,000)
Net sales		$        14,23,000
Expenses
Cost of goods sold		$          7,98,690
Administration expense
Administrative salaries expense	$          1,35,000
Rent expense -office space	$              24,000
Depreciation expense - Office equipment	$              24,800
Total administration expense		$          1,83,800
Selling expense
Rent expense -selling expense	$              24,000
Sales salaries expense	$              97,500
Depreciation expense - Delivery vehicles	$              36,200
Advertising expense	$              22,350
Total Selling expense		$          1,80,050
Total expenses		$        11,62,540
Profit before tax		$          2,60,460
Income taxes expense		$              91,500
Profit after tax		$          1,68,960