Question

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

Inventories Materials January 1 December 31 $376,210 $466,500 677,180 634,440 Work in process Finished goods 650,840 648,440 $316,750 Advertising expense Depreciation expense-office equipment Depreciation expense-factory equipment 44,780 60,180 718,410 23,790 83,970 Direct labor Heat, light, and power-factory Indirect labor Materials purchased Office salaries expense Property taxes-factory Property taxes-headquarters building Rent expense-factory 704,420 245,850 19,590 40,590 33,120 Sales 3,298,160 404,920 Sales salaries expense Supplies-factory Miscellaneous costs-factory 16,330 10,260

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

2. Prepare the 20Y6 income statement.

Answer 1

Statement of Cost of Goods Manufactured 20Y6
Particulars	Amt
Opening Stock of Raw Materials	376,210
Materials Purchased	704,420
Direct Labour	718,410
Less: Closing Stock of Raw Materials	466,500
Prime Cost	1,332,540
Factory Overhead
Opening Stock of Work in Progress	677,180
Depreciation Expense - Factory Equipment	60,180
Heat Light & Power Factory	23,790
Indirect Labour	83,970
Property Tax - Factory	19,590
Rent	33,120
Supplies	16,330
Miscellaneous Cost	10,260
Less: Closing Stock of Work in Progress	634,440
Work Cost	1,622,520
Administration Overhead
Depreciation Expense - Office Equipment	44,780
Office Salaries Expense	245,850
Property Tax - Head Quarters	40,590
Cost Of Production	1,953,740
Opening Stock of Finished Goods	650,840
Less: Closing Stock of Finished Goods	648,440
Cost Of Goods Manufactured	1,956,140

Statement of Income 20Y6
Particulars	Amt
Cost Of Goods Manufactured	1,956,140
Selling & Distribution Overhead
Advertising Expense	316,750
Sales Salaries Expense	404,920
Cost Of Goods Sold (COGS)	2,677,810
Profit (Sales - COGS)	620,350
Sales	3,298,160