Question

ICP 1 - Randeep Inc The following selected account balances for the year ended December 31, 20X9 were taken from the records of Randeep Inc: Sales revenue $1,500,000 Direct materials purchased 120.600 Direct materials freight-in 13.500 Direct labour 130,890 Factory supervision 20.500 General and administrative salaries 200,000 Sales salaries 105,000 Indirect materials - factory 45,600 Utilities (90% factory related) 130,000 Depreciation (85% factory related) 167,000 Property taxes (70% factory related) 56,000 Other general and administrative expenses 63,260 Other selling expenses 75 250 The inventory balances at the beginning and end of the year were as follows: Beginning Endi Direct materials $15,000 $20.000 Work-in-process $42.000 $37.500 Finished goods $81.250 $76,780 Required: a) Prepare a schedule of cost of goods manufactured for the year ended December 3, 20x9 b) Prepare an income statement for the year ended December 31, 20X9.

Answer 1

Add Schedule of Cost of Goods Manufactured For The Year ended Dec 31 Direct Material : Beginning Inventory of Direct Material $ 15,000 Direct Material purchased $ 120,600 Direct Material Freight In $ 13,500 Direct material Available for use $ 149,100 Ending Inventory of Direct Material $ 20,000 Direct Material used in production Add less $ 129,100 Direct Labor $ 130,890 $ $ $ $ $ 20,500 45,600 117,000 141,950 39,200 130000 x 90% 167000 x 85% 56000 x 70% Manufacturing Overhead: Factory Supervisor Indirect Material - Factory Utilies - Factory Depreciation - Factory Property Tax-Factory Total Factory Overhead cost Total Manufacturing cost Beginning Work in Process Total Cost Work in Process Ending Work in Process Cost of Goods Manufactured $ $ Add 364,250 624,240 42,000 666,240 37,500 628,740 less S 1,500,000 Add 81,250 628,740 709,990 76,780 Less $ 633,210 866,790 Income Statement For The Year ended Dec 31 Net Sales Cost of Goods Sold: Beginning Inventory of Finished Goods $ Cost of Goods Manufactured $ Cost of Goods available for Sale $ Ending Inventory of Finished Goods $ Cost of Goods Sold Gross Profit Operating Expenses:- General & administrative Salaries $ Sales Salaries $ Utilities $ Depreciation $ Property Tax $ Other general & administrative expense $ Other Selling Expense $ Total operating Expense Net Operating Income Less 200,000 105,000 13,000 25,050 16,800 63,260 75,250 130000 x 10% 167000 x 15% 56000 x 30% $ $ 498,360 368,430