Question

Question 1: Finn Inc. makes hats. For the month of March 2019. Finn Inc. had these inventory account balances Account Direct Materials Berinning Balance (Jan 1) Ending Balance (Jan 31) $51,000 $34,000 $72,000 $89,000 $23,000 $26,000 Work in Process Finished Goods During March 2019, Finn Inc. had the following transactions: a. Spent $47,000 on direct materials b. Spent $29,000 on direct labor c. Calculated manufacturing overhead to be $25,000 d. Spent $20,000 on administrative expenses e. Spent $45,000 on selling expenses f. Sold 57,000 hats for $5 each Using this information please create a partial income statement for March 2019 for Finn Inc. Income Statement TTTT

Answer 1

Ans.	FINN   INC.
	Income Statement
	For the Month Ended March 2019
	Particulars	Amount	Amount
	Sales (57,000 * $5)		$285,000
	Less: Cost of goods sold		$98,000
	Gross margin		$187,000
	Less: Operating expenses:
	Administrative expenses	$20,000
	Selling expenses	$45,000
	Total operating expenses		$65,000
	Operating Income		$122,000
	*WORKING   NOTES:
	*Calculations for Cost of goods sold:
	FINN   INC.
	Schedule of Cost of Goods Manufactured & Sold
	Particulars	Amount	Amount
	Direct materials:
	Beginning raw materials inventory	$51,000
	Add: Purchase of direct materials	$47,000
	Raw materials available	$98,000
	Less: Ending raw materials inventory	-$34,000
	Direct materials used		$64,000
	Direct labor		$29,000
	Manufacturing overhead applied		$25,000
	Total manufacturing costs		$118,000
	Add: Beginning Work in process inventory		$72,000
	Less: Ending Work in process inventory		-$89,000
	Cost of goods manufactured		$101,000
	Add: Beginning finished goods inventory		$23,000
	Cost of goods available for sale		$124,000
	Less: Ending finished goods inventory		-$26,000
	Cost of goods sold		$98,000