Question

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.

Raw Materials Inventory 7/1/19		$52,600		Factory Insurance		$5,700
Raw Materials Inventory 6/30/20		49,400		Factory Machinery Depreciation		18,100
Finished Goods Inventory 7/1/19		99,400		Factory Utilities		29,900
Finished Goods Inventory 6/30/20		24,300		Office Utilities Expense		8,750
Work in Process Inventory 7/1/19		21,200		Sales Revenue		562,600
Work in Process Inventory 6/30/20		23,200		Sales Discounts		4,400
Direct Labor		142,650		Plant Manager’s Salary		62,400
Indirect Labor		24,960		Factory Property Taxes		9,910
Accounts Receivable		31,400		Factory Repairs		1,600
				Raw Materials Purchases		97,600
				Cash		39,100

1. Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)

2. Prepare an income statement through gross profit.

3. Prepare the current assets section of the balance sheet at June 30, 2020. (List Current Assets in order of liquidity.)

Answer 1

1) A cost of goods manufactured schedule is as follows:

	$	$
Direct Material:
Raw Material Begining	52,600
Add: Purchase of raw material	97,600
Raw material available	150,200
Less:Raw Material Ending	(49,400)
Direct Material		100,800
Direct Labor		142,650
Factory Overhead
Indirect Material	24,960
Factory Insurance	5,700
Factory Machinery Depreciation	18,100
Factory Utilities	29,900
Plant Manager’s Salary	62,400
Factory Property Taxes	9,910
Factory Repairs	1,600	152,570
Total Manufacturing Costs		396,020
Work in Process Inventory Begining		21,200
Work in Process Inventory Ending		(23,200)
Cost of goods manufactured		$394,020

2)An income statement through gross profit is as follows:

	$	$
Sale Revenue	562,600
Less: Sales Discounts	(4,400)
Net Sale Revenue		558,200
Less: Cost of goods Sold
Cost of goods manufactured	394,020
Add:Finished Goods Inventory Begining	99,400
Less: Finished Goods Inventory Ending	(24,300)	(469,120)
Gross Profit		$89,080

3)The current assets section of the balance sheet at June 30, 2020 is prepared below:

Balance sheet at June 30, 2020

Current Assets	$	$
Cash		39,100
Accounts Receivable		31,400
Inventory:
Raw Materials Inventory	49,400
Work in Process Inventory	23,200
Finished Goods Inventory	24,300	96,900
Total Current Assets		$167,400