Question

Required information Use the following information for the Exercises below. The following selected account balances are provided for Delray Mfg. $ Sales Raw materials inventory, beginning Work in process inventory, beginning Finished goods inventory, beginning Raw materials purchases Direct labor Factory supplies used (indirect materials) Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses Raw materials inventory, ending Work in process inventory, ending Finished goods inventory, ending 1,272,000 38,000 52,000 63,500 180, 200 247,000 15,100 46,000 5,250 53,000 81,000 143,000 44,600 41,100 69,100 Exercise 14-14 Income statement preparation LO P2 Prepare an income statement for Delray Mfg. (a manufacturer). DELRAY MFG. Income Statement For Year Enderecember 21 Year 1 < Prey 8 of 9

Answer 1

The income statement of Delray Mfg is shown as follows:

Amount $1,272,000 DELRAY MFG Income Statement Particulars Sales Less: Cost of goods sold Beginning finished goods Add: Cost of goods manufactured Cost of goods available for sale Less: ending finished goods Cost of goods sold Gross Profit Less: Operating expenses Advertising expense General and administrative expenses Total operating expenses Operating Income $63,500 $550,850 $614,350 $69,100 $545,250 $726,750 $81,000 $143,000 $224,000 $502,750

Working Notes:

The value of cost of goods manufactured to be used in income statement is shown as follows:

Amount Schedule of Cost of Goods Manufactured Particulars Direct Materials: Beginning raw material inventory $38,000 Add: Raw materials purchases $180,200 Raw materials available for use $218,200 Less: ending raw materials inventory $44,600 Raw materials consumed Add: direct labor Prime Cost Less: Factory Overheads: Factory supplies used i.e. indirect materials $15,100 indirect labor $46,000 Repairs factory equipment $5,250 Rent cost of factory building $53,000 Toal Manufacturing Cost Add: Beginning work in progress $173,600 $247,000 $420,600 $119,350 $539,950 $52,000 $591,950 $41,100 $550,850 Less: Ending work in progress Cost of Goods Manufactured

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