Question

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 $ 1,162,000 37,000 54,309 68,400 173,800 250,000 23,100 59,000 5,250 56,000 93,000 133,000 48,600 47,600 71,500 Exercise 14-14 Income statement preparation LO P2

Answer 1

Income Statement
Sales		1,162,000
Cost of goods sold
Cost of goods manufactured	501,000
Beginning Finished goods	68,400
Cost of goods available	569,400
Less: Ending Finished Goods	71,500
Cost of goods sold		497,900
Gross Profit		664,100
Operating Expenses
Repairs	5,250
Rent	56,000
Advertisement	93,000
General	133,000
Total Operating Expenses		287,250
Operating Income		376,850

Beginning Inventory	37,000
Purchases	173,800
Less: Ending Inventory	48,600
Direct material used	162,200
Manufacturing cost
Direct material	162,200
Direct Labor	250,000
Factory computer supplies	23,100
Indirect Labor	59,000
Manufacturing cost	494,300
Beginning WIP	54,300
Less: Ending WIP	47,600
Cost of goods manufactured	501,000