Question

P14-4A Prepare a cost of goods manufactured schedule, a partial income statement, and a partial balance sheet
The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2017.
	Raw Materials Inventory,7/1/16	$48,000		Factory Machinery Depreciation		$16,000
	Raw Materials Inventory, 6/30/17	39,600		Factory Utilities		27,600
	Finished Goods Inventory, 7/1/16	96,000		Office Utilities Expense		8,650
	Finished Goods Inventory, 6/30/17	75,900		Sales Revenue		534,000
	Work in Process Inventory, 7/1/16	19,800		Sales Discounts		4,200
	Work in Process Inventory, 6/30/17	18,600		Plant Manager's Salary		58,000
	Direct Labor	139,250		Factory Property Taxes		9,600
	Indirect Labor	24,460		Factory Repairs		1,400
	Accounts Receivable	27,000		Raw Materials Purchases		96,400
	Factory Insurance	4,600		Cash		32,000
Instructions
(a)	Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)
(b)	Prepare an income statement through gross profit.
(c)	Prepare the current assets section of the balance sheet at June 30, 2017.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)	Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)
	CLARKSON COMPANY
	Cost of Goods Manufactured Schedule
	For the Year Ended June 30, 2017
	Work in process inventory, July 1, 2016					Value
	Direct materials
	Raw materials inventory, July 1, 2016			Value
	Raw materials purchases			Value
	Total raw materials available for use			?
	Less: Raw materials inventory, June 30, 2017			Value
	Direct materials used				?
	Direct labor				Value
	Manufacturing overhead
	Plant manager's salary			Value
	Factory utilities			Value
	Indirect labor			Value
	Factory machinery depreciation			Value
	Factory property taxes			Value
	Factory insurance			Value
	Factory repairs			Value
	Total manufacturing overhead				?
	Total manufacturing costs					?
	Total cost of work in process					?
	Less: Work in process, June 30					Value
	Cost of goods manufactured					?
(b)	Prepare an income statement through gross profit.
	CLARKSON COMPANY
	(Partial) Income Statement
	For the Year Ended June 30, 2017
	Sales Revenues
	Sales Revenue			Value
	Less: Sales discounts			Value
	Net Sales				?
	Cost of goods sold
	Finished goods inventory, July 1, 2016			Value
	Cost of goods manufactured			Value
	Cost of goods available for sale			?
	Less: Finished goods inventory, June 30, 2017			Value
	Cost of goods sold				?
	Gross profit				?
(c)	Prepare the current assets section of the balance sheet at June 30, 2017.
	CLARKSON COMPANY
	(Partial) Balance Sheet
	June 30, 2017
	Assets
	Current assets
	Cash			Value
	Accounts Receivable			Value
	Inventories
	Finished goods	Value
	Work in process	Value
	Raw materials	Value		?
	Total current assets			?
After you have completed P14-4A, answer the additional question.
1.	Assume that in preparing the cost of goods manufactured schedule, several errors were made. Raw materials purchases,
	sales revenue and factory depreciation should have been $106,400, $584,000 and $18,000 respectively. Show the impact
	of these changes on the cost of goods manufactured schedule, income statement and balance sheet.

Answer 1

1

Prepare a cost of goods manufactured schedule.

CLARKSON COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended June 30, 2017
Work in Process, 7/1/16			$19,800
Direct materials
Raw Materials Inventory, 7/1/16	$48,000
Raw Materials Purchases	96,400
Total raw materials available for use	144,400
Less: Raw Materials Inventory, 6/30/17	39,600
Direct materials used		$104,800
Direct labor		139,250
Manufacturing overhead
Plant Manager's Salary	58,000
Factory Utilities	27,600
Indirect Labor	24,460
Factory Machinery Depreciation	16,000
Factory Property Taxes	9,600
Factory Insurance	4,600
Factory Repairs	1,400
Total manufacturing overhead		141,660
Total manufacturing costs			385,710
Total cost of work in process			405,510
Less: Work in Process, 6/30/17			18,600
Cost of goods manufactured			$386,910

_________________________________________________

(b) Prepare an income statement through gross profit.

CLARKSON COMPANY
(Partial) Income Statement
For the Year Ended June 30, 2017
Sales Revenues
Sales	$534,000
Less: Sale Discounts	4,200
Net sales		$529,800
Cost of goods sold
Finished Goods Inventory, 7/1/16	96,000
Cost of goods manufactured (see schedule)	386,910
Cost of goods available for sale	482,910
Finished Goods Inventory, 6/30/17	75,900
Cost of goods sold		407,010
Gross profit		$122,790

___________________________________________

(c) Prepare the current assets section of the balance sheet at June 30, 2017.

CLARKSON COMPANY
(Partial) Balance Sheet
June 30, 2017
Assets
Current assets
Cash		$32,000
Account Receivable		27,000
Inventories
Finished Goods Inventory, 6/30/17	$75,900
Work in Process, 6/30/17	18,600
Raw Materials Inventory, 6/30/17	39,600	134,100
Total current assets		$193,100