Question

Required information The following selected account balances are provided for Delray Mfg. $ Sales Raw materials inventory, beginning Work in process inventory, beginning Finished goods inventory, beginning Raw materials purchases Direct labor Factory supplies used (indirect materials) Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, ending Work in process inventory, ending Finished goods inventory, ending 1,128,000 38,000 55,200 65,900 160,800 240,000 22,100 43,000 5,250 55,000 98,000 126,000 49,500 46,700 66,200 Prepare an income statement for Delray Mfg. (a manufacturer).

Answer 1

Income Statement 1128000 65900 501050 566950 66200 Sales Cost of goods sold Finished goods, beginning Cost of goods manufactured Cost of goods available for sale Less: Finished goods, Ending Cost of goods sold Gross Profit Operating expenses Advertising expense General & Admin expenses Total operating expenses Operating Income 500750 627250 98000 126000 224000 403250

Workings:

Schedule of Cost of Goods Manufactured Direct materials used: Raw materials, beginning 38000 Add: Purchases of raw materials 160800 Raw materials available for use 198800 Less: Raw materials, ending 49500 Raw materials used in production 149300 Less: Indirect materials used 22100 127200 Direct Labor 240000 Manufacturing Overhead 125350 Total Manufacturing costs Add: WIP, Beginning 492550 55200 547750 46700 501050 Less: WIP, Ending Cost of Goods Manufactured