Question

The following data from the just completed year are taken from the accounting records of Mason Company Sales Direct labor cos
3. Prepare an income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Requ
2. Prepare a schedule Or COST OF GODS SOIU. Assume that the companys underappred or overappred overnead Is Closed to Goods So


2. Prepare a schedule of cost of goods sold. Assume that the companys underapplied or overapplied overhead is closed to Cost
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Answer #1
Required 1 :
Mason company
Schedule of cost of goods manufactured
Direct materials :
Beginning raw materials 8300
Purchase of raw materials 140000
   Total raw materials available 148300
Ending raw materials 10800
    Raw materials used in production 137500
Direct labor cost 88000
Manufacturing overhead applied 209000
Total manufacturing costs 434500
Beginning work in process 5200
Total cost of work in process 439700
Ending work in process 20400
Cost of goods manufactured 419300
As the manufacturing overhead applied is less than the actual manufacturing overhead, the overhead is underapplied by 13000 [ i.e. 222000 - 209000 ]
Required 2 :
Mason company
Schedule of cost of goods sold
Beginning finished goods inventory 76000
Add: Cost of goods manufactured 419300
Goods available for sale 495300
Less: Ending finished goods inventory 25400
Unadjusted cost of goods sold 469900
(+) Underapplied overhead 13000
Adjusted cost of goods sold 482900
Required 3 :
Mason company
Income statement
Sales 651000
Cost of goods sold 482900
Gross margin 168100
Selling and administrative expense :
   Selling expenses 109000
   Administrative expenses 43000 152000
Net operating income 16100
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