Question

Sales	$	1,272,000
Raw materials inventory, Dec. 31, 2016		35,000
Work in process inventory, Dec. 31, 2016		57,200
Finished goods inventory, Dec. 31, 2016		63,500
Raw materials purchases		184,800
Direct labor		235,000
Factory computer supplies used		15,000
Indirect labor		49,000
Repairs—Factory equipment		5,250
Rent cost of factory building		55,000
Advertising expense		102,000
General and administrative expenses		138,000
Raw materials inventory, Dec. 31, 2017		48,000
Work in process inventory, Dec. 31, 2017		44,000
Finished goods inventory, Dec. 31, 2017		72,000

Prepare an income statement for Delray Mfg. (a manufacturer).

Answer 1

Income Statement for Delray Mfg.

Particular		Amount($)
Sales		1,272,000
Less: Cost of goods sold
Opening Inventory of Raw material	35,000
Opening Inventory of WIP	57,200
Opening Inventory of Finished goods	63,500
Add:Purchases of Raw material	184,800
Direct labor	235,000
Less: Closing inventory of raw material	(48,000)
Closing inventory of WIP	(44,000)
Closing inventory of finished goods	(72,000)
Cost of goods sold		(411,500)
Less: Factory computer supplies used		(15,000)
Less: Indirect Labor		(49,000)
Less: Repairs- Factory equipment		(5,250)
Less: Rent cost of factory building		(55,000)
Less: Advertising expense		(102,000)
Less: General and administrative expenses		(138,000)
Net Income		496,250