Question

1. prepare the companies 2017 schedule of cost of goods manufactured

2. prepare the companies 2017 income statement that reports separate categories for (a) selling expenses and (b) General and administrative expenses

Required information The following information applies to the questions displayed below. The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company. 681,00 Advertising expense Depreciation Depreciation expense Selling equipment Depreciation expense-Factory equipment Factory supervision Factory supplies used Factory utilities Inventories $32,500 Direct labor expense-office equipment 10,600 Income taxes expense 10,600 Indirect labor 34,900 Miscellaneous production costs 289,900 ss,70 11,500 61,004 931,000 27,004 25,300 79,600 35,200 115,400 Office salaries expense 8,400 Raw materials purchases 30,000 Rent expense office space Rent expense Selling space Raw naterials, December 31, 2016 Raw naterials, December 31, 2017 Nork in process,December 31, 2016 Nork in process, December 31, 2017 Pinished goods, December 31, 2016 Finished goods, December 31, 2017 159,100 Rent expense-Factory building 180,000 Maintenance expense-Factory equipment ,505,500 18,700 Sales 20,800 Sales salaries expense 393,100 168,600 136,300

Answer 1

Solution 1:

Leone company
Schedule of cost of goods manufactured
For the year ended December 31, 2017
Direct Materials:
Raw Materials inventory, December 31, 2016	$1,59,100
Add: Purchases of Raw Materials	$9,31,000
Cost of material available for use	$10,90,100
Less: Raw Material Inventory, December 31, 2017	$1,80,000
Raw material used in production		$9,10,100
Direct Labor cost		$6,81,000
Factory Overhead:
Depreciation Expense-Factory Equipment	$34,900
Factory Supervision	$1,15,400
Factory Supplies used	$8,400
Factory Utilities	$30,000
Indirect Labor	$55,700
Miscellaneous production cost	$11,500
Rent expense- Factory Building	$79,600
Maintenance expense-Factory Equipment	$35,200
Total Factory Overhead		$3,70,700
Total Manufacturing Costs Incurred in 2017		$19,61,800
Add: Work in Process, December 31, 2016		$18,700
Subtotal		$19,80,500
Less: Work in process inventory, December 31, 2017		$20,800
Cost of goods manufactured		$19,59,700

Solution 2:

Leone company
Income Statement
For the year ended December 31, 2017
Sales		$45,05,500
Cost of Goods sold:
Finished Goods, December 31, 2016	$1,68,600
Add: Cost of Goods manufactured	$19,59,700
Cost of Goods available for sale	$21,28,300
Less: Finished Goods, Decemebr 31, 2017	$1,36,300	$19,92,000
Gross Profit		$25,13,500
Operating Expenses:
Administrative expenses:
Depreciation Expense- Office Equipment	$10,600
Office Salaries expense	$61,000
Rent expense- Office space	$27,000	$98,600
Selling Expenses:
Advertising Expense	$32,500
Depreciation Expense- Selling Equipment	$10,600
Sales Salaries expenses	$3,93,100
Rent expense- Selling space	$25,300	$4,61,500
Total Operating Expenses		$5,60,100
Income Before Income Tax		$19,53,400
Less: Income Tax expense		$2,89,900
Net Income		$16,63,500