In: Accounting
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 | $55,730 | $74,680 | ||
Materials inventory, December 31 | (a) | 84,390 | ||
Materials purchased | 141,550 | (a) | ||
Cost of direct materials used in production | 149,360 | (b) | ||
Direct labor | 210,100 | 168,030 | ||
Factory overhead | 65,200 | 83,640 | ||
Total manufacturing costs incurred in December | (b) | 483,180 | ||
Total manufacturing costs | 531,660 | 663,160 | ||
Work in process inventory, December 1 | 107,000 | 179,980 | ||
Work in process inventory, December 31 | 90,280 | (c) | ||
Cost of goods manufactured | (c) | 478,700 | ||
Finished goods inventory, December 1 | 94,180 | 83,640 | ||
Finished goods inventory, December 31 | 98,640 | (d) | ||
Sales | 821,460 | 746,800 | ||
Cost of goods sold | (d) | 483,180 | ||
Gross profit | (e) | (e) | ||
Operating expenses | 107,000 | (f) | ||
Net income | (f) | 165,790 |
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.
On Company | |||
Statement of Cost of Goods Manufactured | |||
For the Month Ended December 31 | |||
Work in process inventory, December 1 | $ | ||
Direct materials: | |||
Materials inventory, December 1 | $ | ||
Purchases | |||
Cost of direct materials used in production | $ | ||
Less materials inventory, December 31 | |||
Cost of direct materials used in production | $ | ||
Direct labor | |||
Factory overhead | |||
Total manufacturing costs incurred during December | |||
Total manufacturing costs | $ | ||
Less work in process inventory, December 31 | |||
Cost of goods manufactured | $ |
3. Prepare On Company's income statement for December.
On Company | ||
Income Statement | ||
For the Month Ended December 31 | ||
Sales | $ | |
Cost of goods sold: | ||
Finished goods inventory, December 1 | $ | |
Cost of goods manufactured | ||
Cost of finished goods available for sale | $ | |
Less finished goods inventory, December 31 | ||
Cost of goods sold | ||
Gross profit | $ | |
Operating expenses | ||
Net income | $ |
PART 1: MISSING ITEMS
ON COMPANY
(a) Materials inventory, December 31:
= Materials inventory, December 1 + Materials Purchased - Cost of direct materials used in production
= $55,730 + $141,550 - $149,360
= $47,920
(b) Total Manufacturing costs incurred in December
= Cost of direct materials used in production + Direct Labor + Factory overheads
= $149,360 + $210,100 + $65,200
= $424,660
(c) Cost of goods manufactured
= Total manufacturing cost - Work in process inventory, December 31
= $531,660 - $90,280
= $441,380
(d) Cost of goods sold
Finished goods inventory, December 1+Cost of goods manufactured-Finished goods inventory, December 31
= $94,180 + $441,380 - $98,640
= $436,920
(e) Gross Profit
= Sales - Cost of goods sold
= $821,460 - $436,920
= $384,540
(f) Net Income
= Gross Profit - Operating expenses
= $384,540 - $107,000
= $277,540
OFF COMPANY
(b) Cost of materials used in production
= Total manufacturing cost incurred in December - Direct labor - Factory overhead
= $483,180 - $168,030 - $83,640
= $231,510
(a) Materials Purchased
= Cost of materials used in production - Materials inventory, December 1 + Materials inventory, December 31
= $231,510 - $74,680 + $84,390
= $241,220
(c) Work in process inventory, December 31
= Total manufacturing costs - Cost of goods manufactured
= $663,160 - $478,700
= $184,460
(d) Finished goods inventory, December 31
= Finished goods inventory, December 1 + Cost of goods manufactured - Cost of goods sold
= $83,640 + $478,700 - $483,180
= $79,160
(e) Gross Profit
= Sales - Cost of goods sold
= $746,800 - $483,180
= $263,620
(f) Operating expenses
= Gross Profit - Net Income
= $263,620 - $165,790
= $97,830
PART 2:
ON COMPANY
STATEMENT OF COST OF GOODS MANUFACTURED
FOR THE MONTH ENDED DECEMBER 31
PART 3:
ON COMPANY
INCOME STATEMENT
FOR THE MONTH ENDED DECEMBER 31
All the best...