Question

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

InventoriesJanuary 1December 31

Materials$459,660 $569,980

Work in process827,390 775,170

Finished goods795,210 792,270

Advertising expense$387,020

Depreciation expense-office equipment54,720

Depreciation expense-factory equipment73,530

Direct labor877,770

Heat, light, and power-factory29,070

Indirect labor102,600

Materials purchased860,670

Office salaries expense300,380

Property taxes-factory23,940

Property taxes-headquarters building49,590

Rent expense-factory40,470

Sales4,029,760

Sales salaries expense494,740

Supplies-factory19,950

Miscellaneous costs-factory12,540

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company

Statement of Cost of Goods Manufactured

For the Year Ended December 31, 20Y6

$

Direct materials:

$

$

$

Factory overhead:

$

Total factory overhead

Total manufacturing costs incurred in 20Y6

Total manufacturing costs$

Cost of goods manufactured$

2. Prepare the 20Y6 income statement.

Shanika Company

Income Statement

For the Year Ended December 31, 20Y6

$

Cost of good sold:

$

$

$

Operating expenses:

Administrative expenses:

$

$

Selling expenses:

$

Total operating expenses

$

Answer 1

Shanika Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 20Y6
Work In Progress Inventory, January 1, 20Y6			$ 827,390
Direct Material:
Material Inventory, January 1, 20Y6	$ 459,660
Purchases	$ 860,670
Cost of Materials available for use	$ 1,320,330
Material Inventory, January 31, 20Y6	($ 569,980)
Cost of Direct Materials used in Production		$ 750,350
Direct Labor		$ 877,770
Factory Overhead:
Indirect Labor	$ 102,600
Heat, Light and Power	$ 29,070
Supplies	$ 19,950
Property Taxes	$ 23,940
Rent Expense	$ 40,470
Depreciation expense	$ 73,530
Miscelleneous Costs	$ 12,540
Total Factory Overhead		$ 302,100
Total Manufacturing Cost Incurred during January			$ 1,930,220
Total Manufacturing Costs			$ 2,757,610
Less: Work In Progress Inventory, January 31			($ 775,170)
Cost of Goods Manufatured			$ 1,982,440
Shanika Company Income Statement For the Year Ended December 31, 20Y6
Sales			$ 4,029,760
Cost of goods sold:
Finished goods inventory, January 1, 20Y6		$ 795,210
Cost of goods manufactured		$ 1,982,440
Cost of finished goods available for sale		$ 2,777,650
Finished goods inventory, December 31, 20Y6		($ 792,270)
Less: Cost of goods sold			$ 1,985,380
Gross profit			$ 2,044,380
Operating expenses:
Administrative expenses:
Office salaries expense	$ 300,380
Depreciation expense-office equipment	$ 54,720
Property taxes-headquarters building	$ 49,590	$ 404,690
Selling expenses:
Advertising expense	$ 387,020
Sales salaries expense	$ 494,740	$ 881,760
Total operating expenses			($ 1,286,450)
Net income			$ 757,930