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 $ 1,275,000 44,000 58,000 62,800 195, 400 233,000 24, 400 50,000 5, 250 50,000 107,000 129,000 47,200 43,800 74,600 Prepare an income statement for Delray Mfg. (a manufacturer). DELRAY MFG.

Answer 1

DELRAY MFG
Income statement
For the year ended december 31 year 1
sales						1275000
cost of goods sold
finished goods inventory-beginning					62800
cost of goods manufactured					569050
Cost of goods available for sale					631850
less: finished goods inventory-ending					74600
cost of goods sold						557250
Gross profit						717750
operating expenses
advertising expenses					107000
general & administrative expenses					129000
Total operating expenses						236000
Operating income						481750
Cost of goods manufactured
Direct material inventory-beginning					44000
add: raw material purchased					195400
raw material available for sale					239400
less: raw material inventory-ending					47200
direct material used						192200
Direct labor						233000
factory overhead
Factory supplies used					24400
Indirect labor					50000
repairs-factory equipment					5250
Rent cost of factory building					50000
total factory overhead costs						129650
Total manufacturing cost						554850
add: work in process inventory-beginning						58000
						612850
less: work in process inventory-ending						43800
cost of goods manufactured						569050

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