Question

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

Required information Use the following information for the Exercises below. The following selected account balances are provided for Delray Mfg. $ 1,134,000 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 41,000 53,200 66,300 160,700 230,000 19,300 Factory computer supplies used Indirect labor 51,000 5,250 58,000 98,000 134,000 46,800 42,100 70, 200 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

Answer 1

Delray Mfg. Schedule of Cost of Goods Manufactured For Year Ended December 31, 2017 Direct materials Raw materials inventory, December 31, 2016 Add: Raw materials purchases 41000 160700 Raw materials available for use 201700 Less: Raw materials inventory, December 31, 2017 -46800 Direct materials used 154900 Direct labor 230000 Factory overhead: Factory computer supplies used 19300 Indirect labor 51000 Repairs-Factory equipment 5250 Rent cost of factory building 58000 Total factory overhead costs 133550 Total manufacturing costs 518450 Add: Work in process inventory, December 31, 2016 53200 Total cost of work in process 571650 Less: Work in process inventory, December 31, 2017 -42100 Cost of goods manufactured 529550 Income Statement For Year Ended December 31, 2017 Sales 1134000 Cost of goods sold Finished goods inventory, December 31, 2016 66300 Cost of goods manufactured 529550 Cost of goods available for sale Less: Finished goods inventory, December 31, 2017 595850 -70200 Cost of goods sold 525650 Gross profit 608350 Operating expenses Advertising expense 98000 General and administrative expenses 134000 Total operating expenses 232000 Operating income 376350