Question

PR 18-5B Statement of cost of goods manufactured and income statement for a manufacturing company The following information is available for Shanika Company for 2014: Inventories January 1 December 31 Materials $ 77,350 $ 95,550 Work in process 109,200 96,200 Finished goods 113,750 100,100 Advertising expense $ 68,250 Depreciation expense --office equipment 22,750 Depreciation expense-factory equipment 14,560 Direct labor 186,550 Heat, light, and power-factory 5,850 Indirect labor 23,660 Materials purchased 123,500 Office salaries expense 77,350 Property taxes-factory 4,095 Property taxes-headquarters building 13,650 Rent expense-factory 6,825 Sales 864,500 Sales salaries expense 136,500 Supplies--factory 3,250 Miscellaneous costs-factory 4,420 LIIGPIC 10 IvicsayCHE DELVIRIY LOLCU LIGI FILIPICS Instructions 1. Prepare the 2014 statement of cost of goods manufactured. 2. Prepare the 2014 income statement.

Answer 1

Notes:

1) Statement of cost of goods manaufactured for 2014 is already prepared.

2)Income statement for 2014 is also prepared but there are some missing figures in the income statement. So missing figures are calculated as follows:

                                                      SHANIKA COMPANY

                                          Income Statement

                                           For the year ended December 31,2014

	$	$	$
Sale			864,500
Cost of goods Sold:
Finished Goods Inventory, January 1,2014		113,750
Cost of goods Manufactured		367,510
Cost of finished goods available for sale		481,260
Finished Goods Inventory, December 31,2014		100,100
Cost of goods Sold			381,160
Gross Profit			483,340
Operating Expenses:
Administrative Expenses:
Office Salary Expenses	77,350
Depreciation Expenses - Office Equipment	22,750
Property Taxes - Headquater Building	13,650	113,750
Selling Expenses:
Sales Salaries Expenses	136,500
Advertising Expenses	68,250	204,750
Total Operating Exspense			318,500
Net Income			$164,840