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	$330,810		$410,200
Work in process	595,460		557,870
Finished goods	572,300		570,180

Advertising expense	$278,530
Depreciation expense-office equipment	39,380
Depreciation expense-factory equipment	52,920
Direct labor	631,710
Heat, light, and power-factory	20,920
Indirect labor	73,840
Materials purchased	619,400
Office salaries expense	216,180
Property taxes-factory	17,230
Property taxes-headquarters building	35,690
Rent expense-factory	29,120
Sales	2,900,110
Sales salaries expense	356,050
Supplies-factory	14,360
Miscellaneous costs-factory	9,020

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
Opening WIP				5,95,460
Direct Materials
OP. RM Inventory		3,30,810
Purchases		6,19,400
Total RM available for use		9,50,210
Less:- Cl. RM Inventory		4,10,200
DM use			5,40,010
D. labour			631710
Mfg. OH
Indirect labor		73,840
Propery taxes - factory		17,230
Dep.exp. - FE		52,920
Het, light and power		20,920
Rent exp. - factory		29,120
Supplies factory		14,360
Misc. cost - fcatory		9,020
Total Mfg. OH			2,17,410
Total Mfg. cost				13,89,130
Total cost of WIP				19,84,590
Less :- Cl. WIP				5,57,870
Cost of goods Manufactured				14,26,720
Schedule of Cost of goods sold
Opening Finished Goods		572300
Add:- cost of goods manufactured		14,26,720
Total		1999020
Less:- closing FG		570180
COGS		1428840
Income statement
Sales		2900110
Less:- COGS		1428840
GP		1471270
Less:- Operating exp.
Administrative exp.
Office salaries exp.	216180
Propery taxes - headquarter	35690
Dep.exp. - OE	39380
		291250
Selling exp.
Advertising	278530
Sales salaries exp.	356050	634580
Total exp.		925830
Net income		545440