Question

$ 87 118 1,650 Information on January 1 (Beginning): Direct materials inventory Work-in-process inventory Finished goods inventory Information for the year: Administrative costs Direct labor Direct materials purchases Factory and machine depreciation Factory supervision Factory utilities Indirect factory labor Indirect materials and supplies Marketing costs Property taxes on factory Sales revenue Information on December 31 (Ending): Direct materials inventory Work-in-process inventory Finished goods inventory $ 3,610 12,050 8,280 11,630 746 943 2,870 681 1,520 293 45,700 $ 91 129 1,430 Required: 1. Prepare a cost of goods sold statement. 2. Prepare an income statement.

Answer 1

1	Cost of Goods Sold
	Beginning raw materials inventory	$87
	Add: Purchases of raw materials	$8,280
	Total direct materials available	$8,367
	Less: ending inventory of raw materials	-$91
	Total raw materials used in production	$8,276
	Add: Direct Labor	$12,050
	Add: Manufacturing overhead	$16,482
	Total manufacturing costs	$36,808
	Add: beginning work in process	$118
		$36,926
	Less: ending work in process	-$129
	Cost of goods manufactured	$36,797
	Add: Beginning finished goods inventory	$1,650
	Finished goods available	$38,447
	Less: Ending finished goods inventory	-$1,430
	Cost of goods sold	$37,017
	Manufacturing overhead
	Indirect factory labor	$2,870
	Factory and Machinery Depreciation	$11,630
	Factory supervision	$746
	Factory utilities	$943
	Property taxes on the factory	$293
		$16,482
2
	Income Statement
	Sales revenue	$45,700
	Cost of goods sold	$37,017
	Gross profit		$8,683
	Operating expenses:
	Administrative expenses	$3,610
	Marketing costs	$1,520
	Total operating expenses		$5,130
	Other income (expense):		$3,553