Question

Lederman Manufacturing Corporation (see image) sold 14,000 units of product for $45 each during 2019. During the year, 5,000 shares of common stock were outstanding. Prepare an income starement for the year (ignore income taxes). Calculate earnings per share.

Materials inventory, January 1 Materials inventory. December 31 Work-in-process inventory, January 1 Work-in-process inventory, December 31 Finished goods inventory, January 1 Finished goods inventory, December 31 Net delivered cost of materials purchased. Direct labor. Indirect materials Indirect labor. Factory supplies used. Factory depreciation... Factory repairs and maintenance Selling expenses (total) Non-factory administrative expenses (total) $ 25,000 15,000 30,000 41,000 51,000 36,000 150,000 148,000 12,000 37,000 10,000 65,000 21,000 62,000 58,000 fanturine Cornoration

Answer 1

Forn income statement, we need to pepare the cost of goods manufactured statement first:

Statement of cost of goods manufactured:

Description	Amount	Amount
Materials:
Beginning inventory	$25000
Add: Materials purchased	$150000
Total materials available	$175000
Less: Ending inventrory	($15000)
Cost of materials used		$160000
Direct labor		$148000
Indirect materials		$12000
Indirect labor		$37000
Factorty supplies used		$10000
Factory depreciation		$65000
Factory repairs and maintenance		$21000
Total manufacturing cost		$453000
Add: Beginning work in process		$30000
Less: Ending work in process		($41000)
Cost of goods manufactured		$442000

Next we will find the cost of good sold as per below:

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory

Cost of goods sold = $442000 + $51000 - $36000

Cost of goods sold = $457000

Now, we will prepare the income statement as per below:

Income statement for the year ending December 31, 2019:

Description	Amount
Revenues:
Sales (14000 * $45)	$630000
Total revenues	$63000
Expenses:
Cost of goods sold	$457000
Administrative expenses	$58000
Selling expenses	$62000
Total expenses	($577000)
Net income	$53000
Total number of shares outstanding	5000
Earnings per share (Net income / Total no. of shares outstanding)	$10.6