Question

Check Consider the following information for Fair Wind Yachts Inc., a manufacturer of sailboat rigging, blocks, and cordage. Advertising expenses Depreciation expense-administrative office Depreciation expense-plant and equipment Depreciation expense-delivery trucks Materials inventory, beginning Materials inventory, ending Direct materials purchases Direct labor Indirect labor Finished goods inventory, beginning Pinished goods inventory, ending Insurance on plant Heat and light for plant Repairs on plant building Supervisor's salary-plant Supplies-plant Supplies-administrative office Work-in-process inventory, beginning Work-in-process inventory, ending Sales representatives salaries Sales revenue $ 155,000 77,000 325,000 48,500 21,000 25,500 435.000 532,000 279,000 56,000 45,000 35,000 24,000 38,500 99,500 133,000 79,500 33,500 41,000 327,500 2,989,000 Required: Prepare a statement of cost of goods manufactured and an income statement for Fair Wind Yachts for the year ended December 31

Answer 1

Schedule of Cost of Goods Manufactured Income Statement Direct materials : Direct materials, beginning Add: Purchases of materials Sales Revenue 2989000 Cost of goods sold Finished goods inventory, beginning 21000 435000 56000 Materials available for use Cost of goods manufactured 1889000 456000 Less: Raw materials, ending 1945000 Total goods available for sale 25500 Finished goods inventory, ending Direct materials used 430500 45000 1900000 Cost of goods sold Gross Profit Direct Labor 532000 1089000 Selling & Admin Expenses Advertising expenses Factory Overhead Depreciation expense - Plant Indirect Labor 155000 325000 Depreciation expense - Administrative office 279000 77000 Depreciation expense - Delivery Trucks Supplies - Admin office Sales rep Salaries Total selling & admin expenses Net Profit Insurance on Plant 35000 48500 Heat and Light for Plant Repairs on Plant Building Supervisors salary - plant Supplies - Plant Total Factory Overhead Total Manufacturing costs to account for Add: WIP, Beginning Total Manufacturing costs Less: WIP, Ending Cost of Goods Manufactured 24000 79500 327500 38500 687500 99500 133000 401500 934000 1896500 33500 1930000 41000 1889000