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 $ 34,200 Direct labor 11,200 Income taxes expense 10.000 Indirect labor 31,300 Miscellaneous production coats 137,000 office salaries expense 9.200 Raw materials purchases 43,000 Rent expense office space Rent expense selling space 166.200 Rent expense Factory building 192.000 Maintenance expense-Factory equipment 18.200 Sales 19,800 Sales salaries expense 163.600 138.800 $ 682,500 285,700 59,900 9.200 68,000 935,000 27,000 25,900 77.800 37.100 4,595,400 395.900

Answer 1

LEONE COMPANY
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2017
Direct materials
Raw materials, December 31, 216	$166,200
Add: Raw materials purchases	$935,000
Raw materials available for use	$1,101,200
Less: Raw materials, December 31, 2017	($192,000)
Direct materials used		$909,200
Direct labor		$682,500
Factory overheads:
Depreciation expense - factory equipment	$31,300
Factory supervision	$137,000
Factory supplies used	$9,200
Factory utilities	$43,000
Indirect labor	$59,900
Miscellaneouse production costs	$9,200
Rent expense - Factory building	$77,800
Maintenance expense - Factory equipment	$37,100
Total factory overhead costs		$404,500
Total Manufacturing costs		$1,996,200
Add: Work-in Process Inventory, December 31, 2016		$18,200
Total Cost of Work-in Process		$2,014,400
Less: Work-in Process Inventory, December 31, 2017		($19,800)
Cost of Goods Manufactured		$1,994,600
LEONE COMPANY
Income Statement
For Year Ended December 31, 2017
Sales		$4,595,400
Less: Cost of Goods Sold:
Cost of Goods Manufactured	$1,994,600
Add: Finished Goods Inventory, December 31, 2016	$163,600
Goods available for sale	$2,158,200
Less: Finished Goods Inventory, December 31, 2017	($138,800)
Cost of Goods Sold		($2,019,400)
Gross Margin		$2,576,000
Less: Operating Expenses:
Selling Expenses:
Advertising Expenses	($34,200)
Depreciation Expense - Selling Equipment	($10,000)
Rent Expense - Selling space	($25,900)
Sales salaries expense	($395,900)
Total Selling Expenses		($466,000)
General and administrative expenses:
Depreciation Expense - Office Equipment	($11,200)
Office salaries expense	($68,000)
Rent Expense - Office Space	($27,000)
Total General and Administrative expenses		($106,200)
Total Operating Expenses ($466,000 + $106,200)		($572,200)
Income Before Taxes		$2,003,800
Less: Income Tax Expenses		($285,700)
Net Income		$1,718,100

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