Question

Required information The following selected account balances are provided for Delray Mfg. Sales Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factony building Advertising expense General and administrative expenses Raw materials inventory, Dec- 31, 2017 Work in process inventory, Dec. 31, 2017 Finished goods inventory, Dec. 31, 2017 1,028,000 37,000 54,600 61,900 193,400 241,000 22, 500 47,000 5,250 56,000 83,0e0 139,000 42,400 44, 500 72,700 S Prepare an income statement for Delray Mfg,. (a manufacturer)

Answer 1

DELRAY MFG.
Income Statement
For Year Ended December 31, 2017
Sales		1028000
Cost of goods sold
Finished goods inventory, December 31, 2016	61900
Cost of goods manufactured	569850
Cost of goods available for sale	631750
Less: Finished goods inventory, December 31, 2017	72700
Cost of goods sold		559050
Gross profit		468950
Operating expenses
Advertising expense	83000
General and administrative expenses	139000
Total operating expenses		222000
Operating income		246950
Workings:
Schedule of Cost of Goods Manufactured
Direct materials
Raw materials inventory, December 31, 2016	37000
Add: Raw materials purchases	193400
Raw materials available for use	230400
Less: Raw materials inventory, December 31, 2017	42400
Direct materials used		188000
Direct labor		241000
Factory overhead:
Factory computer supplies used	22500
Indirect labor	47000
Repairs—Factory equipment	5250
Rent cost of factory building	56000
Total factory overhead costs		130750
Total manufacturing costs		559750
Add: Work in process inventory, December 31, 2016		54600
Total cost of work in process		614350
Less: Work in process inventory, December 31, 2017		44500
Cost of goods manufactured		569850