Question

The following data (in thousands of dollars) have been taken from the accounting records of Larop Corporation for the just completed at the year Sales ................................................................................ Purchases of raw materials ............................................. Direct labor ..................................................................... Manufacturing overhead ................................................. Administrative expenses ................................................. Selling expenses.............................................................. ended of 31 March 2018 $870 $190 $200 $230 $150 $140 Raw material Work in process Finished goods Required: Inventory at Inventory at 31.3.2017 31.3.2018 $$ 10 40 20 50 90 130 a. Prepare a Schedule of Cost of Goods Manufactured in b. Compute the Cost of Goods Sold. c. Using data from your answers above as needed, prepare an Income Statement in good form

Answer 1

Schedule of Cost of Goods Manufactured
	(In thousands of dollars)	(In thousands of dollars)
Raw materials used;
Beginning raw materials	$10
+ Raw materials purchased	$190
Raw materials available for use	$200
- Ending raw materials	($40)
Raw materials used		$160
Direct labor		$200
Manufacturing overhead		$230
Total manufacturing costs		$590
+ Beginning work-in-process		$20
- Ending work-in-process		($50)
Cost of goods manufactured		$560

Schedule of Cost of Goods Sold
	(In thousands of dollars)
Beginning finished goods	$90
+ Cost of goods manufactured	$560
- Ending finished goods	($130)
Cost of goods sold	$520

Income Statement
	(In thousands of dollars)
Sales	$870
Less: Cost of goods sold	($520)
Gross profit	$350
Less: Selling and Administrative expenses;
Administrative expenses	($150)
Selling expenses	($140)
Net operating income	$60