Question

Required information

The following selected account balances are provided for Delray Mfg.

Sales	$	1,248,000
Raw materials inventory, Dec. 31, 2016		36,000
Work in process inventory, Dec. 31, 2016		58,100
Finished goods inventory, Dec. 31, 2016		67,100
Raw materials purchases		159,100
Direct labor		245,000
Factory computer supplies used		19,300
Indirect labor		48,000
Repairs—Factory equipment		5,250
Rent cost of factory building		54,000
Advertising expense		104,000
General and administrative expenses		140,000
Raw materials inventory, Dec. 31, 2017		42,700
Work in process inventory, Dec. 31, 2017		44,100
Finished goods inventory, Dec. 31, 2017		68,900

Prepare its schedule of cost of goods manufactured for the year ended December 31, 2017.

.DELRAY MFG
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2017
Direct materials
Raw materials available for use
Direct materials used		$
Factory overhead:
Total factory overhead costs
Total manufacturing costs
Total cost of work in process
Cost of goods manufactured		$

Prepare an income statement for Delray Mfg. (a manufacturer).

DELRAY MFG.
Income Statement
For Year Ended December 31, 2017
Cost of goods sold
Cost of goods available for sale	0
Cost of goods sold		0
Operating expenses
Total operating expenses		0
Operating income		$0

Answer 1

Statement of Cost of goods manufactured an cost of goods sold is as prepared below:

Delray Mfg
Statement of Cost of goods manufactured
For the year ending Dec 31, 2017
Particulars	Amount ($)	Amount ($)
Opening Material	36,000
Add: Direct Material purchase	159,100
Cost of material available for use	195,100
Less: Closing Direct Material	42,700
Cost of Direct Material Used		152,400
Direct Labour Cost		245,000
Factory Computer supplies used	19,300
Indirect Labour	48,000
Repairs-factory equipment	5,250
Rent Cost of factory building	54,000
Total manufacturing overhead		126,550
Total manufacturing Costs		523,950
Add: Beginning Work in Process		58,100
Less: Closing Work in Process		44,100
Cost of goods manufactured		537,950

Delray Mfg
Income Statement
For the year ending Dec 31, 2017
Particulars	Amount ($)	Amount ($)
Sales		1,248,000
Less: Cost of goods sold
Opening finished goods inventory	67,100
Add: Cost of goods manufactured	537,950
Total goods available for sale	605,050
Less: Closing finished goods inventory	68,900
Cost of goods sold		536,150
Gross Margin		711,850
Operating Expenses
Advertising expense	104,000
General and administrative expense	140,000	244,000
Operating Income		467,850