Question

ms. Each one is worth the score indicated next to the problem number. Show all work for complete credit. You may write your answers on the test or attach extra pages. Please be NEAT when writing your answers. I cannot grade illegible answers. (30 points possible) 2t152000 HM 1. (9 points) The following data have been taken from the accounting records of Larder boanite Corporation for the just completed year. M 000,21 Sales.. $1,795,000 $540,000 $335,000 o$340,000 $225,000 $210,000 $190,000 $140,000 d b$150,000i $115,000in $140,000 $175,000 (Purchases of raw materials Direct labor... Applied Manufacturing overhead. Administrative expenses. Selling expenses Raw materials inventory, beginning. Raw materials inventory, ending... 0 WO.Work in process inventory, beginning Work in process inventory, ending.... Finished goods inventory, beginning Finished goods inventory, ending Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form. b. Compute the Cost of Goods Sold. c. Using data from your answers above, prepare an Income Statement (using the traditional format).

Answer 1

a)
Raw materials inventory, beginning	$190,000
Add: Purchase of raw materials	$540,000
Less: Raw materials inventory, ending	($140,000)
Raw materials inventory used		$590,000
Add: Direct labor		$335,000
Add: Applied Manufacturing Overheads		$340,000
Total Manufacturing Costs		$1,265,000
Add: Work in process inventory, beginning		$150,000
Less: Work in process inventory, ending		($115,000)
Cost of Goods Manufactured		$1,300,000

b)
Cost of Goods Manufactured	$1,300,000
Add: Finished Goods Inventory, Beginning	$140,000
Less: Finished Goods Inventory, ending	($175,000)
Cost of Goods Sold	$1,265,000
c)
Sales	$1,795,000
Less: Cost of Goods Sold	($1,265,000)
Gross Profit Margin	$530,000
Less: Selling Expenses	($210,000)
Less: Administrative expenses	($225,000)
Net Income	$95,000