Question

1. (9 points) The following data have been taken from the accounting records of Larder Corporation for the just completed year. Sales. Purchases of raw materials ........... Direct labor Applied Manufacturing overhead. Administrative expenses.................... Selling expenses .... Raw materials inventory, beginning....... Raw materials inventory, ending....... Work in process inventory, beginning...... Work in process inventory, ending.... Finished goods inventory, beginning.... Finished goods inventory, ending. $1,900,000 $320,000 $355,000 $340,000 $325,000 $210,000 $140,000 $190,000 $115,000 $150,000 $175,000 $140,000 Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form. b. Compute the Cost of Goods Sold. c. Using data from your answers above, prepare an Income Statement (using the traditional format).

Answer 1

Answer! a) calculation of Gool of Goods Manufactured partieulars Amount Direel materials:- Amount Less: Beginning Raw Materials Inventory $140,000 Add purchase of raw materials $320,000 Available for use of Raw materials $460.000 Ending Raw Materials Inventory $190,000 Direct Raw Materials used $270,000 Direct Manufacluring labor $355,000 Manufacturing overhead .. $340,000 Manufacturing costs incurred $965.000 Add Beginning work in process $ 115,000 costs to Account for Less $1080,000 Ending work in proceso $ 150,000 Cost of Goods Manufactured $ 930000 6 calculation of cost of goods sold:- particulars - Amount Beginning finished goods inventory $175,000 Addit cost of Goods Manufactured $930000 cost of goods available for sale $1,105,000 Less!. Euding finished goods inventory $140,000 cost of goods sold. $965.000 c) Cakulation of Income statement in - Particulars Amount Amount Revenue of sales $1,900.000 Less: cost of goods sole. $ 965,000 Gross Margin $935000 Less: Selling and administrative expenset Administrative expenses $325,000 Selling expenses $ 210.000 $535000 Selling and administraline expenses $400,000 Operating Income PorceUT