Preparing an Income Statement Using the Cost of Finished Goods Manufactured
Randolph Company reports the following information pertaining to its operating activities:
| Ending Balance | Beginning Balance |
Materials Inventory | $70,000 | $60,000 |
Work in Process Inventory | 41,000 | 79,000 |
Finished Goods Inventory | 16,000 | 21,000 |
During the year, the company purchased $135,000 of direct materials and incurred $22,000 of direct labor costs. Total manufacturing overhead costs for the year amounted to $19,000. Selling and administrative expenses amounted to $30,000, and the company’s annual sales amounted to $280,000.
a. Prepare Randolph’s schedule of the cost of finished goods manufactured.
b. Prepare Randolph’s income statement (ignore income taxes).
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