Question

Koufax Materials Corporation produces plastic products for home appliances and electronics. The financial department has produced the following information for the year ended December 31. Administrative salaries Depreciation on the administrative building Depreciation on the manufacturing plant Direct labor Direct materials inventory, January 1 Direct materials inventory, December 31 Direct materials purchased during the year Distribution costs Finished goods inventory, January 1 Finished goods Inventory, December 31 Indirect labor Insurance con manufacturing plant) Legal fees Maintenance on the manufacturing plant) Manufacturing plant utiities Marketing costs Other manufacturing plant costs Sales revenue Taxes (on manufacturing plant and property) Work-in-process inventory, January 1 Work-in-process inventory, December 31 $ 2,626,000 1,143,000 1,751,000 4,693,500 1,070,200 1,236,000 8,957,000 658,000 1,643,000 1,370,500 543,000 54,200 497,300 216,400 785,100 750,250 631,880 22,655,920 216,600 404,250 397,700 Required: a. Prepare a cost of goods manufactured and sold statement. b. Prepare an income statement

Answer 1

(A)
Koufax Materials Corporation
Statement of Cost of Goods Manufactured and Sold
For the year ended December 31
		(in $)
Particulars	Amount	Amount
Direct Materials Used:
Direct Materials Inventory, January 1	1,070,200
Direct Material Purchased	8,957,000
Less: Direct Materials Inventory, December 31	-1,236,000
Direct Material Used		8,791,200
Direct Labor		4,693,500
Manufacturing Overhead:
Indirect Labor	543,000
Depreciation on Manufacturing Plant	1,751,000
Insurance on Manufacturing Plant	54,200
Maintenance on Manufacturing Plant	216,400
Manufacturing Plant Utilities	785,100
Other Manufacturing Plant Costs	631,880
Taxes on Manufacturing Plant	216,600
Total Manufacturing Overhead		4,198,180
Total Manufacturing Costs		17,682,880
Add: Work-in-progress Inventory, January 1		404,250
Less: Work-in-progress Inventory, December 31		-397,700
COST OF GOODS MANUFACTURED		17,689,430
Add: Finished Goods Inventory, January 1		1,643,000
Less: Finished Goods Inventory, December 31		-1,370,500
COST OF GOODS SOLD		17,961,930
(B)
Koufax Materials Corporation
Income Statement
For the year ended December 31		(in $)
Particulars	Amount	Amount
Sales Revenue		22,655,920
Less: Cost of Goods Sold		-17,961,930
Gross Margin		4,693,990
Less: Operating Expenses
- Administrative Salaries	2,626,000
- Depreciation on Administrative Building	1,143,000
- Distribution Cost	658,000
- Legal Fees	497,300
- Marketing Costs	750,250
		-5,674,550
Income from Operations		-980,560