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

Amount $ 12,72,000 DELRAY MFG Income Statement for the period ended 31st December, Year 1: Particulars Amount $ Sales Less: Cost of goods sold Direct materials :- Raw material inventory, beginning 38,000 Add: Raw material purchases 1,80,200 Raw material available for use 2,18,200 Less: Raw material inventory, ending 44,600 Direct material used 1,73,600 Direct labor 2,47,000 Factory overhead :- Factory supplies used (Indirect materials) 15,100 Indirect labor 46,000 Repair- factory equipment 5,250 Rent cost of factory building 53,000 Total factory overhead 1,19,350 Total manufacturing cost 5,39,950 Add: Work in process inventory, beginning 52,000 Total cost of work in process 5,91,950 Less: Work in process inventory, ending 41,100 Cost of goods manufactured 5,50,850 Add: Finished goods inventory, beginning 63,500 Cost of goods available for sale 6,14,350 Less: Finished goods inventory, ending 69,100 Cost of goods sold Gross Profit Less: Operating expenses General and administrative expenses 1,43,000 Advertising expenses 81,000 Total Operating expenses Income from Operations 5,45,250 7,26,750 2,24,000 5,02,750