Question

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

Inventories	January 1	December 31
Materials	$427,050	$533,810
Work in process	768,690	725,980
Finished goods	738,800	742,000
Advertising expense		$362,460
Depreciation expense-office equipment		51,250
Depreciation expense-factory equipment		68,860
Direct labor		822,070
Heat, light, and power-factory		27,220
Indirect labor		96,090
Materials purchased		806,050
Office salaries expense		281,320
Property taxes-factory		22,420
Property taxes-headquarters building		46,440
Rent expense-factory		37,900
Sales		3,774,040
Sales salaries expense		463,350
Supplies-factory		18,680
Miscellaneous costs-factory		11,740

Required:

1. Prepare the statement of cost of goods manufactured.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
			$
Direct materials:
	$
	$
		$
Factory overhead:
	$
Total factory overhead
Total manufacturing costs incurred
Total manufacturing costs			$
Cost of goods manufactured			$

2. Prepare the income statement.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
			$
Cost of goods sold:
		$
		$
			$
Operating expenses:
Administrative expenses:
	$
		$
Selling expenses:
	$
Total operating expenses
			$

Answer 1

1.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Direct materials inventory , beginning	427,050
Add:Direct materials purchases	806,050
Raw Material available for use	1,233,100
Less:Ending raw material inventory	-533,810
Raw material used		699,290
Direct labor		822,070
Factory Overheads:
Depreciation expense-factory equipment	68,860
Heat, light, and power-factory	27,220
Rent expense-factory	37,900
Indirect labor	96,090
Property taxes-factory	22,420
Supplies-factory	18,680
Miscellaneous costs-factory	11,740
Total Manufacturing Overheads		282,910
Total Manufacturing Cost		1,804,270
Add :Work in process inventory, beginning		768,690
Less: Work in process inventory, ending		-725,980
Cost of goods manufactured		$1,846,980.00

2.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
Sales			3,774,040
Cost of goods sold:
Finished goods inventory, beginning		738,800
Cost of goods manufactured		1,846,980
Cost of goods available for sale		2,585,780
Finished goods inventory, Ending		-742,000
Cost of goods sold			-1,843,780
Gross profit			1,930,260
Operating expenses:
Administrative expenses:
Depreciation expense-office equipment	51,250
Office salaries expense	281,320
Property taxes-headquarters building	46,440
Total administrative expenses		379,010
Selling expenses:
Advertising expense	362,460
Sales salaries expense	463,350
Total selling expenses		825,810
Total operating expenses			1,204,820
Net income ( Gross profit - Total operating expenses)			$725,440

Kindly comment if you need further assistance. Thanks