Question

! Required information Problem 1-3A Schedule of cost of goods manufactured and income statement; inventory analysis LO P2, A1 [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 $ 28,750 7,250 8,600 33,550 102,600 7,350 33,000 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 Direct labor Income taxes expense Indirect labor Miscellaneous production costs Office salaries expense Raw materials purchases Rent expense-office space Rent expense-Selling space Rent expense-Factory building Maintenance expense-Pactory equipment Sales Sales salaries expense 675,480 233, 725 56,875 8,425 63,000 925,000 22,000 26,100 76,800 35,400 4,462,500 392,560 166,850 182,000 15,700 19,380 167,350 136,490

Answer 1

LEONE COMPANY Schedule of Cost of Goods Manufactured For Year Ended Deceember 31, 2017
Direct Materials :
Beginning Raw Material	$ 166,850
Add: Purchase of Raw Material	$ 925,000
Raw Material Available for use	$ 1,091,850
Less: Ending Raw Materials	($ 182,000)
Direct Materials used		$ 909,850
Direct Labor		$ 675,480
Factory Overhead:
Depreciation Expense-Factory Equipment	$ 33,550
Factory Supervision	$ 102,600
Factory Supplies used	$ 7,350
Factory utilities	$ 33,000
Indirect Labor	$ 56,875
Miscellaneous Production costs	$ 8,425
Rent Expense-Factory Building	$ 76,800
Maintenance expense-Factory equipment	$ 35,400
Total Factory overheads cost		$ 354,000
Total Manufacturing Cost		$ 1,939,330
Add: Beginning Work in Process		$ 15,700
Total cost of Work in Progress		$ 1,955,030
Less: Ending Work in Process		($ 19,380)
Cost of Goods Manufactured		$ 1,935,650

LEONE COMPANY Income Statement For Year Ended Deceember 31, 2017
Sales		$ 4,462,500
Cost of Goods Sold
Cost of Goods Manufactured	$ 1,935,650
Add: Beginning Finished Goods	$ 167,350
Goods Available for sale	$ 2,103,000
Less: Ending Finished Goods	($ 136,490)
Less: Cost of Goods Sold		($ 1,966,510)
Gross Profit		$ 2,495,990
Operating Expenses
Selling Expenses
Advertising Expense	$ 28,750
Depreciation expense-Selling Equipment	$ 8,600
Rent expense-Selling space	$ 26,100
Sales salaries expense	$ 392,560
Total Selling expenses		$ 456,010
General and administrative Expenses
Depreciation expense-Office Equipment	$ 7,250
Office salaries expense	$ 63,000
Rent expense-Office space	$ 22,000
Total General and administrative Expenses		$ 92,250
Total Operating Expenses		($ 548,260 )
Income before taxes		$ 1,947,730
Less: Income taxes expense		( $ 233,725)
Net Income		$ 1,714,005