Question

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December On Off Company Company $86,850 $118,980 (a) 134,450 Materials inventory, December 1 Materials inventory, December 31 Materials purchased Cost of direct materials used in production 220,600 (a) 232,760 (b) 327,420 267,710 Direct labor 101,610 133,260 (b) 769,800 828,540 1,056,540 166,750 286,740 Factory overhead Total manufacturing costs incurred in December Total manufacturing costs Work in process inventory, December 1 Work in process inventory, December 31 Cost of goods manufactured Finished goods inventory, December 1 Finished goods inventory, December 31 140,700 (c) (c) 762,660 146,780 133,260 153,720 (d) 1,280,170 Sales (d) Cost of goods sold 1,189,800 769,800 (e) (0) Gross profit Operating expenses 166,750 264,140 Net income Required: 1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Answer 1

1) On company

a) Materials inventory, December 31= Materials inventory, December 1+Purchases-Cost of direct materials used in production

= $86850+220600-232760= $74690

b) Total manufacturing costs incurred during December= Cost of direct materials used in production+Direct labor+Factory overhead

= $232760+327420+101610= $661790

c) Cost of goods manufactured= Total manufacturing costs-Work in process inventory, December 31

= $828540-140700= $687840

d) Cost of goods sold= Finished goods inventory, December 1+Cost of goods manufactured-Finished goods inventory, December 31

= $146780+687840-153720= $680900

e) Gross profit= Sales-Cost of goods sold

= $1280170-680900= $599270

f) Net income= Gross profit-Operating expenses

= $599270-166750= $432520

Off company

e) Gross profit= Sales-Cost of goods sold

= $1189800-769800= $420000

f) Operating expenses= Gross profit-Net income

= $420000-264140= $155860

d) Finished goods inventory, December 31= Finished goods inventory, December 1+Cost of goods manufactured-Cost of goods sold

= $133260+762660-769800= $126120

c) Work in process inventory, December 31= Total manufacturing costs-Cost of goods manufactured

= $1056540-762660= $293880

b) Cost of direct materials used in production= Total manufacturing costs incurred during December-Direct labor-Factory overhead

= $769800-267710-133260= $368830

a) Materials purchased= Cost of direct materials used in production+Materials inventory, December 31-Materials inventory, December 1

= $368830+134450-118980= $384300

	On Company	Off Company
a.	$74690	$384300
b.	$661790	$368830
c.	$687840	$293880
d.	$680900	$126120
e.	$599270	$420000
f.	$432520	$155860

2)

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory, December 1			$166750
Direct materials:
Materials inventory, December 1	$86850
Purchases	220600
Cost of materials available for use	307450
Less: Materials inventory, December 31	74690
Cost of direct materials used in production		$232760
Direct labor		327420
Factory overhead		101610
Total manufacturing costs incurred during December			661790
Total manufacturing costs			828540
Less: Work in process inventory, December 31			140700
Cost of goods manufactured			$687840

3)

On Company
Income Statement
For the Month Ended December 31
Sales		$1280170
Cost of goods sold
Finished goods inventory, December 1	$146780
Cost of goods manufactured	687840
Cost of goods available for sale	834620
Less: Finished goods inventory, December 31	153720
Cost of goods sold		680900
Gross profit		599270
Operating expenses		166750
Net income		$432520

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