Question

The Rogue River Manufacturing Company The following information was taken from the year-end Adjusted Trial Balance of the Rogue River Manufacturing Company: + Manufacturing Accounts: Materials Inventory - Resin A, January 1 Materials Inventory - Resin A, December 31 Materials Inventory - Hardener Q, January 1 Materials Inventory - Hardener Q, December 31 Work in Process Inventory, January 1 Work in Process Inventory, December 31 Materials Purchased Cost - Resin A Materials Purchased Cost - Hardener Direct Manufacturing Labor Cost - Dept. A Direct Manufacturing Labor Cost – Dept. B Supervisory Labor Cost Set-up Cost Utility Cost Engineering Cost Fringe Benefit Cost Purchasing Cost Data Entry Cost Depreciation Cost Property Tax Cost Insurance Cost Non-manufacturing Accounts: Notes Payable - Short-term Retained Earnings - January 1 Finished Goods Inventory, January 1 Cash Finished Goods Inventory, December 31 Interest Expense (General & Admin.) Accounts Payable Marketing, Delivery Expense Marketing, Advertising Expense Plant and Equipment Income Tax Payable Accumulated Depreciation Administrative Expense Accounts Receivable Sales Revenue Dividends Declared Common Stock $2,712 3,528 8,000 10,526 20,000 50,000 42,110 178,900 120,317 98,974 900,000 298,222 15,233 40,015 168,213 52,300 10,111 360,000 18,000 60,000 $90,092 658,848 38,555 209,000 46,800 12,200 34,422 327,000 120,000 4,081,000 From Income Statement 900,000 300,000 309.500 3,757,000 300,000 2,650,000

Additional Information:

1. For this project, round to the nearest whole dollar.
2. The income tax rate is 35%.
3. The company uses actual costing

Create a Statement of Retained Earnings

Answer 1

The Rogue River Manufacturing Company Statement of Retained Earnings Opening balance, Retained Earnings, Jan 1 Add: Net Income during the year $658,848 $439,997 $1,098,845 $300,000 $798,845 Less: Dividend declared Closing balance, Retained Earnings Dec 31 Working notes: Direct Material consumed Materials inventory, Beginning Purchases Cost of materials available for use Less materials inventory, Ending Direct Material consumed Resin A Hardener $2,712 $8,000 $42,110 $178,900 $44,822 $186,900 $3,528 $10,526 $41,294 $176,374 The Rogue River Manufacturing Company Statement of Cost of Goods Manufactured Work in process inventory, Beginning $20,000 Direct Material consumed Resin A $41,294 Hardener $176,374 $217,668 Direct labor Dept A $120,317 Dept B $98,974 $219,291 Manufacturing overhead applied Supervisory Labor cost $900,000 Set-up cost $298,222 Utility cost $15,233 Engineering cost $40,015 Fringe Benefit cost $168,213 Purchasing cost $52,300 Data Entry cost $10,111 Depreciation cost $360,000 Property tax cost $18,000 Insurance cost $60,000 Total Manufacturing overheads $1,922,094 $2,359,053 Total manufacturing costs $2,379,053 Less work in process inventory, Ending $50,000 Cost of goods manufactured $2,329,053 The Rogue River Manufacturing Company Schedule of Cost of Goods Sold Beginning Finished goods inventory $38,555 Add: Cost of goods manufactured $2,329,053 Cost of goods available for sale $2,367,608 Ending Finished goods inventory $46,800 Cost of goods sold $2,320,808 The Rogue River Manufacturing Company Income Statement For The Year Ended 2019 Sales $3,757,000 Less: Cost of goods sold $2,320,882 Gross profit $1,436,118 Less: Operating expenses Marketing expense Delivery expenses $327,000 Advertisement expense $120,000 Total marketing expenses $447,000 Administrative expense Administrative expense $300,000 Interest expense $12,200 Total Administrative expenses $312,200 Income before income tax $676,918 Income tax expenses at 35% $236,921 Net Income $439,997