Question

Required information The following information applies to the questions displayed below.) The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company. Advertising expense Depreciation expense-office equipment Depreciation expense-Selling equipment Depreciation expense-Factory equipment Factory supervision Factory supplies used Factory utilities Inventories Raw materials, December 31, 2016 Raw materials, December 31, 2017 Work in process, December 31, 2016 Work in process, December 31, 2017 Finished goods, December 31, 2016 Finished goods, December 31, 2017 $ 26,100 Direct labor 8,700 Income taxes expense 10,100 Indirect labor 33,900 Miscellaneous production costs 127,800 Office salaries expense 7,700 Raw materials purchases 44,000 Rent expense-Office space Rent expense-Selling space 161,200 Rent expense-Factory building 182,880 Maintenance expense-Factory equipment 19,580 Sales 20,300 Sales salaries expense 168,380 143, 100 688,880 271,600 56,100 10,100 66,000 968,000 29,000 25,300 79,300 36,100 4,456,800 399,900 2. Prepare the company's 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses. LEONE COMPANY Income Statement For Year Ended December 31, 2017 Sales $ 4,456,800 Cost of goods sold Cost of goods manufactured Finished goods inventory, December 31, 2016 Goods available for sale

Answer 1

LEONE COMPANY
	SCHEDULE OF COST OF GOODS MANUFACTURED
	For the year ended December 31, 2017
	Direct materials:
	Raw materials inventory, December 31, 2016	161,200.00
	Raw material purchases	968,000.00
	Raw materials available for use	1,129,200.00
	Less: Raw materials inventory, December 31, 2017	182,000.00
	Direct materials used		947,200.00
	Direct labor		688,800.00
	Factory overhead:
	Factory supervision	127,800.00
	Factory supplies used	7,700.00
	Factory utilities	44,000.00
	Maintenance expense-Factory equipment	36,100.00
	Rent expense-Factory building	79,300.00
	Depreciation expense-Factory equipment	33,900.00
	Indirect labor	56,100.00
	Miscellaneous production costs	10,100.00
	Total factory overhead costs		395,000.00
	Total manufacturing costs		2,031,000.00
	Add: Work in process inventory, December 31, 2016		19,500.00
	Total cost of goods in process		2,050,500.00
	Less: Work in process inventory, December 31, 2017		20,300.00
	Cost of goods manufactured		2,030,200.00
	LEONE COMPANY
	INCOME STATEMENT
	For the year ended December31, 2017
	Sales		4,456,800.00
	Cost of goods sold:
	Cost of goods manufactured	2,030,200.00
	add: Finished goods inventory, December 31, 2016	168300
	Goods available for sale	2,198,500.00
	Less: Finished goods inventory, December 31, 2017	143100
	Cost of goods sold		2,055,400.00
	Gross profit from sales		2,401,400.00
	Operating expenses:
	Selling expenses:
	Depreciation expense-Selling equipment	10,100.00
	Rent expense-Selling space	25,300.00
	Sales salaries expense	399,900.00
	Advertising expense	26,100.00
	Total selling expenses		461,400.00
	General and administrative expenses:
	Rent expense-Office space	29,000.00
	Office salaries expense	66,000.00
	Depreciation expense-Office equipment	8,700.00
	Total general and administrative expenses		103,700.00
	Income before taxes		1,836,300.00
	Income tax expense		271,600.00
	Net Income		1,564,700.00