Question

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3] Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ 218,000 $ 268,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 152,000 $ 366,000 $ 352,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year End of Year $ 52,000 $ 38,000 ? $ 30,000 $ 36,000 ? The total manufacturing costs for the year were $670,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $35,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
please help me with steps in detail! thank you!

Answer 1

Solutions:

Superior Company
Income Statement
Sales ($405000+651000)	$10,59,000
Less: Cost of goods sold [$668000- ($366000-$352000)]	$6,54,000
Gross Profit ($35000+$218000+$152000)	$4,05,000
Less: Expenses:
Selling Expenses	$2,18,000
Administrative expense	$1,52,000
Net operating income	$35,000

Superior Company
Schedule of cost of goods sold
Cost of goods manufactured (750000-36000)	$7,14,000
Add: Finished Goods, Beginning	$36,000
Total goods available for sale	$7,50,000
Less: Finished Goods, Ending ($750000-$668000)	$82,000
Unadjusted Cost of goods Sold	$6,68,000
Less: Overapplied Overhead ($366000-$352000)	$14,000
Cost of goods Sold	$6,54,000

Superior Company
Schedule of cost of goods manufactured
Direct Material:
Raw Material, Beginning	$52,000
Add: Purchase of Raw Material	$2,68,000
Total Raw material available	$3,20,000
Less: Raw Material, Ending	$38,000
Raw material used in production		$2,82,000
Direct Labor cost ($670000-282000-366000)		$22,000
Applied Manufacturing Overhead		$3,66,000
Total Manufacturing Costs		$6,70,000
Add: Work in Process, Beginning ($744000-$670000)		$74,000
Subtotal ($714000+$30000)		$7,44,000
Less: Work in Process, Ending		$30,000
Cost of goods manufactured ($750000-$36000)		$7,14,000