Question

The following selected account balances are provided for Delray Mfg.

Sales	$	1,446,000
Raw materials inventory, Dec. 31, 2016		37,000
Work in process inventory, Dec. 31, 2016		53,400
Finished goods inventory, Dec. 31, 2016		68,100
Raw materials purchases		197,900
Direct labor		249,000
Factory computer supplies used		19,600
Indirect labor		54,000
Repairs—Factory equipment		5,250
Rent cost of factory building		52,000
Advertising expense		80,000
General and administrative expenses		132,000
Raw materials inventory, Dec. 31, 2017		43,600
Work in process inventory, Dec. 31, 2017		45,000
Finished goods inventory, Dec. 31, 2017		70,700

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

Answer 1

Answer with working note is given below

Delray Manufacturing Income Statement For the year ended December 31, 2017 Amount $1,446,000 $576,950 As per working note below $869,050 Sales Less: Cost of Goods Sold Gross profit Less: Operating expenses General and Administrative expenses Advertising expense Net profit $132,000 $80,000 $212,000 $657,050 Working note: Total Cost Delray Manufacturing Statement of Cost of Goods Manufactured For the year ended December 31, 2017 Particulars Opening inventory of Raw Material $37,000 Add: purchases $197,900 Total Direct Material Available $234,900 Less: Closing inventory of Raw Material $43,600 Raw material consumed Direct Labor Prime Cost $191,300 $249,000 $440,300 Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factory building $19,600 $54,000 $5,250 $52,000 Add: Opening work in process inventory 130,850 $571,150 $53,400 $624,550 $45,000 $579,550 Less: Closing work in process inventory Cost of Goods Manufactured Delray Manufacturing Statement of Cost of Goods Sold For the year ended December 31, 2017 Opening Finished Goods inventory Add: Cost of Goods manufactured Cost of Goods available for sale Less: Closing Finished Goods inventory Cost of Goods Sold Amount $68,100 $579,550 As per working above $647,650 $70,700 $576,950