Question

! ! Required information The following selected account balances are provided for Delray Mfg. Sales Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, Dec. 31, 2017 Work in process inventory, Dec. 31, 2017 Finished goods inventory, Dec. 31, 2017 $ 1,367,000 44,000 57,600 69,000 163,700 245,000 17,700 47,000 5, 250 52,000 97,000 139,000 41,400 43,400 72,000 Prepare an income statement for Delray Mfg. (a manufacturer). DELRAY MFG. Income Statement For Year Ended December 31, 2017 $ 1,367,000 Sales Cost of goods sold Cost of goods available for sale 0

Answer 1

Schedule of cost of goods manufactured

Direct materials
Raw materials, Beginning	$44,000
Add: Raw materials Purchased	$163,700
Raw materials available for use	$207,700
Less: Raw materials, Ending	($41,400)
Direct materials		$166,300
Direct labor		$245,000
Manufacturing overhead:
Indirect Labor	$47,000
Repairs cost of factory building	$52,000
Repairs- Factory Equipment	$5,250
Factory computer supplies used	$17,700
Manufacturing overhead		$121,950
Total manufacturing costs		$533,250
Add: Beginning Work-in-process		$57,600
Total cost in process		$590,850
Less: Ending Work-in-process		($43,400)
Cost of goods manufactured		$547,450

Income statement

Sales		$1,367,000
Cost of goods sold
Beginning Finished goods	$69,000
Add: Cost of goods manufactured	$547,450
Cost of goods available for sale	$616,450
Less: Ending finished goods	($72,000)
Cost of goods sold		$544,450
Gross margin		$822,550
Less: Operating expenses
Advertising expense	$97,000
General and administrative expenses	$139,000
Total operating expenses		$236,000
Net income		$586,550