Question

The following information is available for Robstown Corporation for 20Y8:

Inventories	January 1	December 31
Materials	$352,000	$436,200
Work in process	632,000	590,800
Finished goods	606,200	574,000

	December 31
Advertising expense	$ 295,400
Depreciation expense-office equipment	43,800
Depreciation expense-factory equipment	56,340
Direct labor	669,400
Heat, light, and power-factory	22,220
Indirect labor	77,000
Materials purchased	659,200
Office salaries expense	185,300
Property taxes-factory	18,500
Property taxes-office building	31,600
Rent expense-factory	33,000
Sales	3,015,000
Sales salaries expense	418,000
Supplies-factory	15,200
Miscellaneous costs-factory	9,700

	Required:
A.	Prepare the 20Y8 statement of cost of goods manufactured.*
B.	Prepare the 20Y8 income statement.* * Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Be sure to complete the statement heading. Labels For the Year Ended December 31, 20Y8 For the Month Ended December 31 At Year Ended December 31, 20Y8 Amount Descriptions Advertising expense Cost of direct materials used Cost of finished goods available for sale Cost of goods manufactured Cost of goods sold Cost of materials available for use Depreciation expense-factory equipment Depreciation expense-office equipment Direct labor Finished goods inventory, December 31, 20Y8 Finished goods inventory, January 1, 20Y8 Gross profit Heat, light, and power-factory Indirect labor materials inventory, December 31, 20Y8 Materials inventory, January 1, 20Y8 Miscellaneous costs-factory Net income Office salaries expense Property taxes-factory Property taxes-office building Purchases Rent expense-factory Sales Sales salaries expense Supplies-factory Total manufacturing costs incurred Total operating expenses work in process inventory, December 31, 20Y8 Work in process inventory, January 1, 20Y8

Answer 1

Solution A:

Robstown Corporation
Schedule of Cost of goods manufactured
For the year ended 20Y8
Particulars		Amount
Direct material consumed:
Beginning material inventory	$352,000.00
Add: Purchases	$659,200.00
Less: Ending material inventory	$436,200.00
Direct material used		$575,000.00
Direct labor		$669,400.00
Factory Overhead:
Depreciation expense - Factory Equipment	$56,340.00
Heat, light and power - factory	$22,220.00
Indirect labor	$77,000.00
Property taxes - factory	$18,500.00
Rent Expense - factory	$33,000.00
Supplies - Factory	$15,200.00
Miscellenous cost - factory	$9,700.00
Total factory overhead		$231,960.00
Total manufacturing costs incurred during period		$1,476,360.00
Add: Beginning WIP		$632,000.00
Total manufacturing costs		$2,108,360.00
Less: Ending WIP		$590,800.00
Cost of goods manufactured		$1,517,560.00

Solution B:

Robstown Corporation
Income Statement
For the year ended 20Y8
Particulars		Amount
Sales Revenue		$3,015,000.00
Cost of goods sold:
Beginning finished goods inventory	$606,200.00
Add: Cost of goods manufactured	$1,517,560.00
Less: ending finishesd goods inventory	$574,000.00
Cost of goods sold		$1,549,760.00
Gross Profit		$1,465,240.00
Operating Expenses:
Advertising expenes	$295,400.00
Depreciation expense - Office equipment	$43,800.00
Office salaries expenses	$185,300.00
Property taxes - office building	$31,600.00
Sales salaries expense	$418,000.00
Total operating expenses		$974,100.00
Net Income		$491,140.00