Question

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

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

Inventories	January 1	December 31
Materials	$344,300	$420,050
Work in process	619,740	571,270
Finished goods	595,640	583,870
Advertising expense		$285,210
Depreciation expense-office equipment		40,320
Depreciation expense-factory equipment		54,190
Direct labor		646,880
Heat, light, and power-factory		21,420
Indirect labor		75,610
Materials purchased		634,280
Office salaries expense		221,370
Property taxes-factory		17,640
Property taxes-headquarters building		36,540
Rent expense-factory		29,820
Sales		2,969,750
Sales salaries expense		364,600
Supplies-factory		14,700
Miscellaneous costs-factory		9,240

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
Total manufacturing costs			$
Cost of goods manufactured			$

2. Prepare the income statement.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
			$
Cost of goods sold:
		$
		$
			$
Operating expenses:
Administrative expenses:
	$
		$
Selling expenses:
	$
Total operating expenses
			$

Answer 1

1)
Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31. 20Y6
Work in process on January 1			$619,740
Direct Materials:
Materials on January 1	$344,300
Add: Materials Purchased	$634,280
Total materials available for use	$978,580
Less: Materials on December 31	($420,050)
Direct materials used		$558,530
Direct labor		$646,880
Factory overheads:
Depreciation expense - factory equipment	$54,190
Heat, light and power-factory	$21,420
Indirect labor	$75,610
Property taxes-factory	$17,640
Rent expense-factory	$29,820
Supplies-factory	$14,700
Miscellaneous costs-factory	$9,240
Total factory overheads		$222,620
Total Manufacturing Costs			$1,428,030
Total cost of work in process			$2,047,770
Less: Work in process on December 31			($571,270)
Cost of Goods Manufactured			$1,476,500
2)
Shanika Company
Income Statement
For the Year Ended December 31. 20Y6
Sales Revenue			$2,969,750
Less: Cost of goods sold:
Cost of Goods Manufactured		$1,476,500
Add: Finished goods on January 1		$595,640
Less: Finished goods on December 31		($583,870)
Cost of Goods Sold			$1,488,270
Gross Margin			$1,481,480
Less: Operating expenses:
Administrative expenses:
Depreciation expense-office equipment	$40,320
Office salaries expense	$221,370
Property taxes-headquarters building	$36,540
Total administrative expenses		$298,230
Selling expenses:
Advertising expense	$285,210
Sales salaries expense	$364,600
Total selling expenses		$649,810
Total operating expenses			$948,040
Operating Income			$533,440