Question

The following information is available for Robstown Corporation for 20Y8: Inventories January 1 December 31 Materials $44,250 $31,700 Work in process 63,900 80,000 Finished goods 101,200 99,800 December 31 Advertising expense $ 400,000 Depreciation expense-office equipment 30,000 Depreciation expense-factory equipment 80,000 Direct labor 1,100,000 Heat, light, and power-factory 53,300 Indirect labor 115,000 Materials purchased 556,600 Office salaries expense 318,000 Property taxes-factory 40,000 Property taxes-office building 25,000 Rent expense-factory 27,000 Sales 3,850,000 Sales salaries expense 200,000 Supplies-factory 9,500 Miscellaneous costs-factory 11,400 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

1. Cost of Goods Sold -

Cost of goods sold means cost required to sell the goods. The goods which are sold how much cost are incurred on the products that are sold.

Cost of goods sold comprises of Material, Direct Labour, Factory Overheads. We have to add opening balances of Work in progress inventory and finished goods. Also we have to deduct closing inventory which are still in the assets of the company and not utilised against goods sold.

2. Income Statement -