Question

2. Prepare the company's 2019 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses. LEONE COMPANY Income Statement For Year Ended December 31, 2019 Cost of goods sold Goods available for sale Cost of goods sold Operating expenses Selling expenses

Answer 1

975,900 691,700 $ LEONE COMPANY Schedule of Cost of Goods Manufactured For Year Ended December 31, 2019 Direct materials Raw materials inventory, December 31, 2018 $ 159,900 Raw materials purchases $ 998,000 Raw materials available for use $ 1,157,900 Less: Raw materials inventory, December 31, 2019 $ 182,000 Direct materials used Direct labor Factory overhead Depreciation expense-Factory equipment $ 39,600 Factory supervision $ 122,200 Factory supplies used 7,700 Factory utilities 43,000 Rent expense-Factory building 78,000 Maintenance expense-Factory equipment 39,500 Miscellaneous production costs 10,200 Indirect labor 59,200 Total factory overhead costs Total manufacturing costs Add: Work in process inventory, December 31, 2018 Total cost of work in process Less: Work in process inventory, December 31, 2019 Cost of goods manufactured $ 399,400 $ 2,067,000 $ 18,100 $ 2,085,100 $ 24,600 $ 2,060,500

$ 4,576,100 $ 2,088,600 $ 2,487,500 LEONE COMPANY Income Statement For Year Ended December 31, 2019 Sales Cost of goods sold Cost of goods manufactured $ 2,060,500 Add: Finished goods inventory, December 31, 2018 $ 163,500 Goods available for sale $ 2,224,000 Less: Finished goods inventory, December 31, 2019 $ 135,400 Cost of goods sold Gross profit from sales Operating expenses Selling expenses Depreciation expense-Selling equipment 11,000 Rent expense-Selling space $ 29,300 Sales salaries expense $ 390,700 Advertising expense $ 27,300 Total selling expenses General and administrative expenses Depreciation expense-Office equipment 8,800 Office salaries expense 71,000 Rent expense-Office space 24,000 Total general and administrative expenses Total operating expenses Income before taxes Income taxes expense Net income $ 458,300 $ 103,800 $ 562,100 $ 1,925,400 $ 238,200 $ 1,687,200