Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

	On Company		Off Company
Materials inventory, December 1	$74,990		$100,490
Materials inventory, December 31	(a)		113,550
Materials purchased	190,470		(a)
Cost of direct materials used in production	200,970		(b)
Direct labor	282,710		226,100
Factory overhead	87,740		112,550
Total manufacturing costs incurred in December	(b)		650,170
Total manufacturing costs	715,400		892,350
Work in process inventory, December 1	143,980		242,180
Work in process inventory, December 31	121,480		(c)
Cost of goods manufactured	(c)		644,140
Finished goods inventory, December 1	126,730		112,550
Finished goods inventory, December 31	132,730		(d)
Sales	1,105,350		1,004,900
Cost of goods sold	(d)		650,170
Gross profit	(e)		(e)
Operating expenses	143,980		(f)
Net income	(f)		223,090

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2. Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

Working notes:

	On Company	Off Company
Materials inventory, December 1	$74,990	$100,490
Materials inventory, December 31 ($74,990 + $190,470 - $200,970)	$64,490	$113,550
Materials purchased ($113,550 + $311,520 - $100,490)	$190,470	$324,580
Cost of direct materials used in production ($650,170 - $112,550 - $226,100)	$200,970	$311,520
Drect labor	$282,710	$226,100
Factory overhead	$87,740	$112,550
Total manufacturing costs incurred in December ($200,970 + $282,710 + $87,740)	$571,420	$650,170
Total manufacturing costs	$715,400	$892,350
Work in process inventory, December 1	$143,980	$242,180
Work in process inventory, December 31 ($892,350 + $242,180 - $644,140)	$121,480	$490,390
Cost of goods manufactured ($715,400 - $121,480)	$593,920	$644,140
Finished goods inventory, December 1	$126,730	$112,550
Finished goods inventory, December 31 ($644,140 + $112,550 - $650,170)	$132,730	$106,520
Sales	$1,105,350	$1,004,900
Cost of goods sold ($593,920 + $126,730 - $132,720)	$587,920	$650,170
Gross profit ($1,105,350 - $587,920); ($1,004,900 - $650,170)	$517,430	$354,730
Operating expense ($354,730 - $223,090)	$143,980	$131,640
Net income ($517,430 - $143,980)	$373,450	$223,090

1)
Letter	On Company	Off Company
a)	$64,490	$324,580
b)	$571,420	$311,520
c)	$593,920	$490,390
d)	$587,920	$106,520
e)	$517,430	$354,730
f)	$373,450	$131,640

2)
On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory December 1			$143,980
Direct materials:
Direct materials inventory Decembr 1	$74,990
Add: Purchases	$190,470
Total Direct materials available	$265,460
Less: Direct materials inventory December 31	($64,490)
Total Direct materials used		$200,970
Direct labor		$282,710
Factory overheads		$87,740
Total manufacturing costs incurred during December			$571,420
Total manufacturing costs			$715,400
Less: Work in process inventory December 31			($121,480)
Cost of Goods Manufactured			$593,920

3)
On Company
Income Statement
For the Month Ended December 31
Sales		$1,105,350
Less: Cost of Goods Sold;
Cost of Goods Manufactured	$593,920
Add: Finished Goods Inventory December1	$126,730
Total Goods Available for Sale	$720,650
Less: Finished Goods Inventory December 31	($132,730)
Cost of Goods Sold		($587,920)
Gross Margin		$517,430
Less: Operating Expenses		($143,980)
Net Income		$373,450