Question

In: Accounting

Advertising expense $22,250                                      

Advertising expense $22,250                                       Direct labor $564,500

Depreciation expense – Office Equip $10,440            Income taxes expense $138,700

Depreciation expense – Selling Equip. $ 12,125          Indirect labor $61,000

Depreciation expense – Factory Equip. $37,400          Misc. Production costs $10,400

Factory supervision $123,400                                       Office salaries expense $ 72,875

Factory supplies used (indirect materials) $8,060         Raw Materials purchased $896,375

Factory utilities $39,500                                                 Rent expense- office $25,625

INVENTORIES:                                                              Rent expense- selling space $29,000

Raw Materials, Dec 31, 2018 $42,375                            Rent expense- factory building $95,500

Raw Materials, Dec 31, 2019 $72,430                            Maintenance expense- factory $32,375

Goods-in-Process, Dec 31, 2018 $14,500                      Sales $5,002,000

Goods-in-Process, Dec 31, 2019 $16,100                      Sales discounts $59,375

Finished Goods, Dec 31, 2018 $179,200                       Sales salaries expense $297,300

Finished Goods, Dec 31, 2019 $143,750

  1. Prepare Income Statement

DATE   ACCOUNT NAMES
A   Raw Materials Inventory
         Accounts Payable
  
B   Goods-in-Process Inventory
         Raw Materials Inventory
  
C   Factory Payroll
         Cash
  
D   Goods-in-Process Inventory
   Factory Overhead
        Factory Payroll
  
E   Factory Overhead
        Accum. Dep., Factory
        Cash
  
F   Goods-in-Process Inventory
        Factory Overhead
  
G   Finished Goods Inventory
        Goods-in-Process Inventory
  
H   Cost of Goods Sold
        Finished Goods Inventory
  
I   Factory Overhead
        Cost of Goods Sold

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Expert Solution

Answer to the question:

Income statement:

Income Statement
For the year ended Dec 31 2019
Particular Amount
Income
Sales $        5,002,000
Total A $        5,002,000
Expenses
Cost of good sold (See note 1) $            900,170
Direct Labor $            564,500
Indirect Labor $              61,000
Misc production cost $              10,400
Factory Supervision $            123,400
Factory utilites $              39,500
Factory supplies used (indirect materials) $                8,060
Maintenance expense- Factory $              32,375
Depreciation expense- Factory equip $              37,400
Advertising expense $              22,250
Depreciation expense- Office equip $              10,440
Depreciation expense- Selling equip $              12,125
Sales discounts $              59,375
Sales Salaries expenses $            297,300
Rent expense- Office $              25,625
Rent expense- Selling space $              29,000
Rent expense- factory building $              95,500
Office salaries expense $              72,875
Total B $        2,401,295
Income before taxes (A-B) $        2,600,705
Income tax expenses $            138,700
Income after taxes $        2,462,005

Working Notes:

1. Cost of Sales
Purchases made $896375
Add: Inventory as on Dec,31,2018
Raw Material $42375
Goods in process $14500
Finished goods $179200
Less: Inventory as on Dec,31, 2019 $72430
Goods in process $16100
Finished goods $143750
Cost of Goods sold    $900170   

ekkarill92 answered 3 years ago
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