Question

Required information Problem 14-3A Schedule of cost of goods manufactured and income statement; inventory analysis LO P2, A1 (The following information applies to the questions displayed below.) The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company Advertising expense Depreciation expense-Office equipment Depreciation expense-Selling equipment Depreciation expense-Factory equipment Factory supervision Factory supplies used Factory utilities Inventories Raw materials, December 31, 2016 Raw materials, December 31, 2017 Work in process, December 31, 2016 Work in process, December 31, 2017 Finished goods, December 31, 2016 Finished goods, December 31, 2017 $ 28,750 Direct labor 7,250 Income taxes expense 8,600 Indirect labor 33,55e Miscellaneous production costs 102,6ee Office salaries expense 7,350 Raw materials purchases 33,000 Rent expense-office space Rent expense-Selling space 166,850 Rent expense-Factory building 182,000 Maintenance expense-Factory equipment 15.700 Sales 19,380 Sales salaries expense 167,350 136,490 $ 675,480 233,725 56,875 8,425 63, 925,000 22,000 26,100 76,800 35,400 4,462,500 392,560

Answer 1

SCHEDULE OF COST OF GOODS MANUFACTURED
For the year ended December 31, 2017
Direct materials:
Raw materials inventory, December 31, 2016	166850.00
Raw material purchases	925000.00
Raw materials available for use	1091850.00
Less: Raw materials inventory, December 31, 2017	182000.00
Direct materials used		909850.00
Direct labor		675480.00
Factory overhead:
Factory supervision	102600.00
Factory supplies used	7350.00
Factory utilities	33000.00
Maintenance expense-Factory equipment	35400.00
Rent expense-Factory building	76800.00
Depreciation expense-Factory equipment	33550.00
Indirect labor	56875.00
Miscellaneous production costs	8425.00
Total factory overhead costs		354000.00
Total manufacturing costs		1939330.00
Add: work in process inventory, December 31, 2016		15700.00
Total cost of goods in process		1955030.00
Less: work in process inventory, December 31, 2017		19380.00
Cost of goods manufactured		1935650.00
LEONE COMPANY
INCOME STATEMENT
For the year ended December31, 2017
Sales		4462500
Cost of goods sold:
Cost of goods manufactured	1935650.00
Finished goods inventory, December 31, 2016	167350.00
Goods available for sale	2103000.00
Less: Finished goods inventory, December 31, 2017	136490.00
Cost of goods sold		1966510.00
Gross profit		2495990.00
Operating expenses:
Selling expenses:
Depreciation expense-Selling equipment	8600.00
Rent expense-Selling space	26100.00
Sales salaries expense	392560.00
Advertising expense	28750.00
Total selling expenses		456010.00
General and administrative expenses:
Rent expense-Office space	22000.00
Office salaries expense	63000.00
Depreciation expense-Office equipment	7250.00
Total general and administrative expenses		92250.00
Income before taxes		1947730.00
Income tax expense		233725.00
Net Income		1714005.00