Question

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

Inventories	January 1		December 31
Materials	$216,380		$270,480
Work in process	389,480		367,850
Finished goods	374,340		375,970

Advertising expense	$183,660
Depreciation expense-office equipment	25,970
Depreciation expense-factory equipment	34,890
Direct labor	416,540
Heat, light, and power-factory	13,790
Indirect labor	48,690
Materials purchased	408,420
Office salaries expense	142,540
Property taxes-factory	11,360
Property taxes-headquarters building	23,530
Rent expense-factory	19,200
Sales	1,912,290
Sales salaries expense	234,780
Supplies-factory	9,470
Miscellaneous costs-factory	5,950

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Work in process inventory, January 1, 20Y6			$
Direct materials:
Materials inventory, January 1, 20Y6	$
Purchases
Cost of materials available for use	$
Materials inventory, December 31, 20Y6
Cost of direct materials used in production		$
Direct labor
Factory overhead:
Indirect labor	$
Depreciation expense-factory equipment
Heat, light, and power-factory
Property taxes-factory
Rent expense-factory
Supplies-factory
Miscellaneous costs-factory
Total factory overhead
Total manufacturing costs incurred in 20Y6
Total manufacturing costs			$
Work in process inventory, December 31, 20Y6
Cost of goods manufactured			$

2. Prepare the 20Y6 income statement.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
			$
Cost of good sold:
		$
		$
			$
Operating expenses:
Administrative expenses:
	$
		$
Selling expenses:
	$
Total operating expenses
			$

Answer 1

1.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Work in process inventory, January 1, 20Y6			389,480
Direct materials:
Materials inventory, January 1, 20Y6	216,380
Purchases	408,420
Cost of materials available for use	624,800
Materials inventory, December 31, 20Y6	-270,480
Cost of direct materials used in production		354,320
Direct labor		416,540
Factory Overhead:
Indirect labor	48,690
Depreciation expense-factory equipment	34,890
Heat, light, and power-factory	13,790
Property taxes-factory	11,360
Rent expense-factory	19,200
Supplies-factory	9,470
Miscellaneous costs-factory	5,950
Total Factory Overhead		143,350
Total manufacturing costs incurred in 20Y6			914,210
Total manufacturing costs			1,303,690
Work in process inventory, December 31, 20Y6			-367,850
Cost of goods manufactured			$935,840

2.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
Sales revenue			1,912,290
Cost of goods sold:
Finshed goods inventory , January 1, 20Y6		374,340
Cost of goods manufactured		935,840
Cost of goods available for sale		1,310,180
Finshed goods inventory, December 31, 20Y6		-375,970
Cost of goods sold			-934,210
Gross profit			978,080
Operating expenses:
Administrative expenses:
Depreciation expense - Office equipment	25,970
Office salaries expense	142,540
Property taxes-headquarters building	23,530
Total Administrative expenses		192,040
Selling expenses:
Advertisement expense	183,660
Sales salaries expense	234,780
Total selling expenses		418,440
Total operating expenses			-610,480
Net operating profit			$367,600

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