Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December:

	On Company		Off Company
Materials inventory, December 1	$86,200		$110,350
Materials inventory, December 31	(a)		124,715
Materials purchased	218,900		(a)
Cost of direct materials used in production	249,100		(b)
Direct labor	325,030		248,290
Factory overhead	100,890		123,610
Total manufacturing costs incurred in December	(b)		713,935
Total manufacturing costs	840,540		979,875
Work in process inventory, December 1	165,520		265,940
Work in process inventory, December 31	139,630		(c)
Cost of goods manufactured	(c)		707,330
Finished goods inventory, December 1	145,670		123,705
Finished goods inventory, December 31	152,550		(d)
Sales	1,270,720		1,103,500
Cost of goods sold	(d)		714,045
Gross profit	(e)		(e)
Operating expenses	165,520		(f)
Net income	(f)		244,915

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2. Prepare On Company's statement of cost of goods manufactured for December.

Note: If an amount should be subtracted, begin entry with a minus (-) sign.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

3. Prepare On Company's income statement for December.

Note: If an amount should be subtracted, begin entry with a minus (-) sign.

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

letter		On		Off
		Company		Company
a.		56,000		356,400
b.		675,020		342,035
c.		700,910		272,545
d.		694,030		116,990
e.		576,690		389,455
f.		411,170		144,540

Cost of goods manufactured (On company)
Work in process inventory,december 1							165,520
Raw materials inventory,December 1					86,200
materials purchased					218,900
cost of raw materials available for use					305,100
Raw materials inventory,December 31					56,000
Cost of direct materials used in production						249,100
Direct labor						325,030
Factory overhead						100,890
Total manufacturing cost incurred in December							675,020
Total manufacturing cost							840,540
work in process inventory ,December 31							139,630
cost of goods manufactured							700,910

sales							1,270,720
Cost of goods sold
Finished goods inventory,December 1						145,670
cost of goods manufactured						700,910
cost of goods available for sale						846,580
Finished goods inventory,December 31						152,550
Cost of goods sold							694,030
Gross profit							576,690
less operating expense							165,520
net income							411,170

working notes for off company

Cost of goods manufactured (Off company)
Work in process inventory,december 1							265,940
Raw materials inventory,December 1					110,350
materials purchased					356,400
cost of raw materials available for use					466,750
Raw materials inventory,December 31					124,715
Cost of direct materials used in production						342,035
Direct labor						248,290
Factory overhead						123,610
Total manufacturing cost incurred in December							713,935
Total manufacturing cost							979,875
work in process inventory ,December 31							272,545
cost of goods manufactured							707,330
Cost of goods sold
Finished goods inventory,December 1						123,705
cost of goods manufactured						707,330
cost of goods available for sale						831,035
Finished goods inventory,December 31						116,990
Cost of goods sold						714,045
income statement
sales						1,103,500
less cost of goods sold						714,045
Gross profit						389,455
less operating expense						144,540
net income						244,915