Question

The following information is available for Robstown Corporation for 20Y8:

Inventories	January 1	December 31
Materials	$78,650	$93,450
Work in process	108,000	96,000
Finished goods	114,750	109,800

	December 31
Advertising expense	$ 68,600
Depreciation expense-office equipment	21,250
Depreciation expense-factory equipment	14,640
Direct labor	185,050
Heat, light, and power-factory	5,250
Indirect labor	23,600
Materials purchased	124,800
Office salaries expense	76,900
Property taxes-factory	4,080
Property taxes-office building	13,250
Rent expense-factory	6,925
Sales	863,000
Sales salaries expense	137,500
Supplies-factory	3,250
Miscellaneous costs-factory	5,760

	Required:
	a. Prepare the 20Y8 statement of cost of goods manufactured. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
	b. Prepare the 20Y8 income statement. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive.

Answer 1

a.

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$          78,650
Add: Purchases	$        124,800
Total Raw Material Available	$        203,450
Deduct : Raw Material in inventory, ending	$          93,450
Raw Material used in production		$        110,000
Direct Labor		$        185,050
Manufacturing Overhead
Depreciation expense-factory equipment	$          14,640
Heat, light, and power-factory	$            5,250
Indirect labor	$          23,600
Property taxes-factory	$            4,080
Rent expense-factory	$            6,925
Supplies-factory	$            3,250
Miscellaneous costs-factory	$            5,760	$          63,505
Total Manufacturing Costs		$        358,555
Add: Beginning Work in Process Inventory		$        108,000
		$        466,555
Deduct: Ending Work in Process Inventory		$          96,000
Cost of Goods Manufactured		$       370,555

b.

Income Statement
Sales Revenue		$        863,000
Cost of Goods Sold
Finished Goods Inventory, Beginning	$        114,750
Add: Cost of Goods Manufactured	$        370,555
Cost of Goods Available for sale	$        485,305
Deduct : Finished Goods Inventory, Ending	$        109,800
Cost of Goods Sold		$        375,505
Gross Profit		$       487,495
Operating Expenses
Depreciation on Office equipment	$          21,250
Office salaries expense	$          76,900
Property taxes-office building	$          13,250
Sales salaries expense	$        137,500
Total Operating Expenses		$        248,900
Net Income		$       238,595