Question

10 The following selected account balances are provided for Delray Mfg. Sales $1,340,000 42,000 58,400 66,700 166,200 242,000 17,500 58,000 5,250 51,000 106,000 136,000 46,600 40, ০০0 70,700 Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Part 2 of 2 10 Factory computer supplies used Indirect 1abor Repaira-Facetory 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 points eBook Hint Prepare an Income statement for Delray Mfg. (a manufacturer). Print DELRAY MFG. Income Statement References For Year Ended December 31, 2017 Cost of goods sold Cost of goods available for sale Cost of goods sold Operating expenses Total operating expenses Operating income

Answer 1

DEFRAY MFG.
Income Statement
For Year Ended December 31, 2017
Sales		$1340000
Cost of goods sold
Finished goods inventory, Dec 31, 2016	66700
Cost of goods manufactured	553750
Cost of goods available for sale	620450
Less: Finished goods, inventory, Dec 31, 2017	70700
Cost of goods sold		549750
Gross profit		790250
Operating expenses
Advertising expense	106000
General and administrative expenses	136000
Total operating expenses		242000
Operating income		$548250

Working Notes

Calculation of Cost of goods manufactured

Direct materials
Raw materials inventory, Dec 31, 2016	$42000
Add: Raw materials purchases	166200
Raw materials available for sale	208200
Less: Raw materials inventory, Dec 31, 2017	46600
Direct materials used		161600
Direct labor		242000
Factory overhead
Factory computer supplies used	17500
Indirect labor	58000
Repairs- Factory equipment	5250
Rent cost of factory building	51000
Total factory overhead costs		131750
Total manufacturing costs		535350
Add: Work in process inventory, Dec 31, 2016		58400
		593750
Less: Work in process inventory, Dec 31, 2017		40000
Cost of goods manufactured		$553750