Question

E14-14 The following information is available for Aikman Company. January 1, 2017 2017 December 31, 2017 Raw materials inventory $21,000 $30,000 Work in process inventory 13,500 17,200 Finished goods inventory 27,000 21,000 Materials purchased $150,000 Direct labor 220,000 Manufacturing overhead 180,000 Sales revenue 910,000 Instructions (a) Compute cost of goods manufactured. (b) Prepare an income statement through gross profit. (c) Show the presentation of the ending inventories on the December 31, 2017, balance sheet. (d) How would the income statement and balance sheet of a merchandising company be different from Alkman's financial statements? E14.15 University Company produces collegiate apparel. From its accounting records, it prepares the following schedule and financial statements on a yearly basis. (a) Cost of goods manufactured schedule. (b) Income statement. (c) Balance sheet. The following items are found in its ledger and accompanying data. 1. Direct labor 2. Raw materials inventory, 1/1 3. Work in process inventory, 12/31 4. Finished goods inventory, 1/1 5. Indirect labor 6. Depreciation on factory machinery 7. Work in process, 1/1 8. Finished goods inventory, 12/31 9. Factory maintenance salaries 10. Cost of goods manufactured 11. Depreciation on delivery equipment 12. Cost of goods available for sale 13. Direct materials used 14. Heat and electricity for factory 15. Repairs to roof of factory building 16. Cost of raw materials purchases Instructions List the items (1-10). For each item, indicate by using the appropriate letter or letters the schedule and/or financial statement(s) in which the item will appear A An analysis of the accounts of Roberts Company reveals the following manufac. turing cost data for the month ended June 30, 2017 Beginning Ending Raw materials $9.000 Inventory P Work in fact.

Answer 1

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Aikman Company
Answer a
Cost of goods manufactured	Amount $	Amount $	Amount $
Beginning Work in process inventory			13,500.00
Direct materials used
Beginning Raw material inventory	21,000.00
Raw material Purchases	150,000.00
Total Raw material available for use	171,000.00
Less: Ending Raw material inventory	30,000.00
Direct materials used		141,000.00
Direct Labor		220,000.00
Total Manufacturing Overhead		180,000.00
Total Manufacturing costs			541,000.00
Total cost of work in process			554,500.00
Less: Ending Work in process inventory			17,200.00
Cost of goods manufactured			537,300.00
Answer b
Income Statement	Amount $	Amount $
Sales Revenues
Sales Revenues		910,000.00
Cost of goods sold
Beginning Finished goods inventory	27,000.00
Cost of goods manufactured	537,300.00
Cost of goods available for sale	564,300.00
Less: Finished goods inventory, ending	21,000.00
Cost of goods sold		543,300.00
Gross Profit		366,700.00
Answer c
Balance Sheet
Current Assets	Amount $	Amount $
Inventories
Finished goods	21,000.00
Work in process	17,200.00
Raw materials	30,000.00
Total Current Assets		68,200.00
Answer d
Merchandising company does not have work in process or raw materials inventory. They buy finished goods/merchandise and sell them on profit. So its income statement will not have raw material inventory, work in process inventory, direct labor, etc. Rather it will have merchandise inventory, salaries to staff and overhead costs like rent, depreciation, etc.