Question

Consider the following information for Huntersville Inc. for the fiscal year ended December 31.

Depreciation expense—administrative office	$	33,750
Depreciation expense—plant and equipment		88,500
Direct labor—wages		507,000
Materials Inventory, Dec. 31		29,750
Materials Inventory, Jan. 1		21,500
Direct materials purchases		167,500
Finished goods inventory, Dec. 31		24,400
Finished goods inventory, Jan. 1		15,500
Heat, light, and power—plant		45,500
Indirect labor		26,000
Property taxes—plant		35,250
Sales representatives’ salaries		147,500
Sales revenue		1,541,000
Factory supervisor’s salary		66,750
Supplies—administrative office		17,000
Supplies—plant		29,500
Work-in-process inventory, Dec. 31		10,000
Work-in-process inventory, Jan. 1		24,250

Required:

Prepare a statement of cost of goods manufactured and an income statement for Huntersville for the year ended December 31.

Complete this question by entering your answers in the tabs below.

• Stmt of COGM
• Income Statement

Prepare a statement of cost of goods manufactured for Huntersville for the year ended December 31.

	Huntersville, Inc Statement of Cost of Goods Manufactured For the Year Ended December 31 Direct materials Materials available Direct materials used Factory overhead Total factory overhead Total manufacturing costs Total manufacturing costs to account for Cost of goods manufactured

Answer 1

Solution:

a.

	Schedule of Cost of goods manufactured
	Title	Amount $	Amount $
	Direct materials:
	Beginning raw material inventory	21,500
	Add: Purchases of raw material	167,500
	Total raw materials available	189,000
	Less: Ending raw materials inventory	-29,750
a	Raw materials used in production	159,250	159,250
b	Direct labor		507,000
	Factory overhead:
	Depreciation expense - Plant and equipment	88,500
	Heat, light and power - plant	45,500
	Indirect labor	26,000
	Property taxes - plant	35,250
	Factory supervisor's salary	66,750
	Supplies - plant	29,500
c	Total Factory overheads	291,500	291,500
d	Total manufacturing cost ( a + b+ c )		957,750
	Add: Beginning work in process inventory		24,250
	Total Manufacturing Cost to Account for		982,000
	Less: Ending work in process inventory		-10,000
	Cost of goods manufactured		972,000

b.

	Income statement
	Title	Amount $	Amount $
a	Sales revenue		1,541,000
	Less: Cost of goods sold
	Beginning finished goods inventory	15,500
	Add: Cost of goods manufactured	972,000
	Cost of goods available for sale	987,500
	Less: Ending finished goods inventory	-24,400
b	Cost of goods sold	963,100	-963,100
c	Gross profit (a - b )		577,900
	Less: Selling and administrative expenses
	Depreciation expense - Administrative office	33,750
	Supplies - Administrative office	17,000
	Sales representatives salaries	147,500
d	Total Selling and administrative expenses	198,250	-198,250
e	Net income ( c - d)		379,650