Question

Required information Use the following information for the Exercises below. 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 factory 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 $ 1,266,000 39,000 57,000 64,000 158,500 236,000 19,400 59,000 5,250 51,000 104,000 134,000 47,000 39,700 66,700 Exercise 1-14 Income statement preparation LO P2

Answer 1

$ 1,266,000 DELRAY MFG. Income statement For Year Ended December 31, 2017 Sales Cost of Goods sold |Finished Goods Inventory, December 31, 2016 S 64.000 Add: cost of Goods Manufactured S 538.450 Cost of Goods availble for Sale $ 602,450 Less: Finished Goods Inventory december 31,2017 $ 66,700 Cost of Goods sold Gross Profit Operating expenses Advertising expense $ 104.000 General and administrative Expenses S 134.000 Total Operating Expenses Operating Income S 535,750 $ 730,250 $ $ 238.000 492,250

$ 150,500 $ 236,000 Working Notes: DELRAY MFG. Schedule of Cost of Goods Manufactured For Year Ended December 31, 2017 Direct Materials: Raw Materials Inventory, December 31, 2016 $ 39,000 Raw materials Purchase $ 158,500 Raw materials available for use $ 197,500 Less: Raw Material Inventory, December 31,2017 $ 47,000 Direct materials used Direct labor Factory Overhead Factory computer Supplies used $ 19,400 Indirect Labor $ 59,000 Repairs - Factory equipment $ 5,250 Rent Cost of Factory Building $ 51,000 Total Factory oveerhead Cost Total Manufacturing Costs Add: Work in Process Inventory, December 31,2016 Total cost of work in process Less: Work in process inventory, December 31, 2017 Cost of goods Manufactured $ 134.650 $ 521.150 $ 57,000 $ 578,150 $ 39,700 $ 538.450