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 $ 1,250,000 37,000 53,900 62,750 175,600 225,000 17,840 47,000 5,250 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 57,000 94,000 129,300 42,700 41,500 67,300 Exercise 14-14 Income statement preparation LO P2

Answer 1

Solution

DELRAY MFG
Income Statement
For the year ended December 31, year 1
Sales		$ 1,250,000
Cost of Goods Sold
Beginning Finished Goods Inventory	$ 62,750
Cost of goods Manufactured	$ 516,550
Goods Avalable for sale	$ 579,300
Less: Ending Finished Goods Inventory	$ 67,300
Cost of Goods Sold		$ 512,000
Gross Profit		$ 738,000
Operating Expenses
General and Administrative expenses	$ 129,300
Selling Expenses
Advertisement Expenses	$ 94,000
Total Operating expenses		$ 223,300
Net Income		$ 514,700

.Working

DELRAY MFG
Cost of Goods manufactured
Labels	Amount Descriptions	Amount Descriptions
Direct materials
Direct materials inventory, Beginning	$ 37,000
Direct materials purchases	$ 157,760
Cost of direct materials available for use	$ 194,760
Direct materials inventory, Ending	$ 42,700
Cost of direct materials placed in production		$ 152,060
Direct labor		$ 225,000
Factory overhead
Indirect Labor	$ 47,000
Factory Computer supplies used	$ 17,840
Repairs—Factory equipment	$ 5,250
Rent Expenses-Factory	$ 57,000
Total Factory Overheads		$ 127,090
Total Manufacturing Cost		$ 504,150
Add: Work in process inventory , Beginning		$ 53,900
Total work in process during the period		$ 558,050
Less: Work in process inventory, Ending		$ 41,500
Costs of good manufactured		$ 516,550